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927 points smallerfish | 1 comments | | HN request time: 0.001s | source
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portaouflop ◴[] No.42926658[source]
IMF gave them 1.4 billion to abandon the “experiment”:

> The IMF made this a condition for a loan of 1.4 billion US dollars (1.35 billion euros). In December of last year, the IMF reached an agreement with President Nayib Bukele’s government on the loan of the stated amount to strengthen the country’s “fiscal sustainability” and mitigate the “risks associated with Bitcoin,” as it was described.

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I dislike cryptocurrencies as much as the next guy but this was clearly something else than a failure of the currency itself

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dragonwriter ◴[] No.42928058[source]
If you need to go to the IMF for a loan of ~3% of your GDP to mitigate the risks associated with Bitcoin, well, that's a pretty good sign that adopting Bitcoin as legal tender was a pretty disastrous failure.
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golergka ◴[] No.42928091[source]
> to mitigate the risks associated with Bitcoin

Was that the goal of the loan? How did you come to this conclusion?

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dragonwriter ◴[] No.42928111[source]
Its literally stated. in those words, in the upthread excerpt that describes them receiving the loan.
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1. Lerc ◴[] No.42930345[source]
The target of the funds is not related to bitcoin.

"The program is anchored on improving the underlying primary balance by around 3½ percent of GDP over 3 years, to put the ratio of public debt to GDP on a firm downward path after peaking at 85 percent of GDP in 2024. High quality measures, worth 1½ percent of GDP in 2025, already included in the approved budget, will reduce the wage bill, spending on goods and services, and transfers to municipalities. To ensure fiscal sustainability and a further reduction in borrowing costs, reform efforts will center on strengthening the efficiency of the civil service, the viability of the pension system, and revenue mobilization. Fiscal consolidation will be conducted in a manner that strengthens support for the most vulnerable and protects priority public investment."

The assessment of their economy seems broadly positive

“The Salvadoran economy has steadily expanded since the pandemic, on the back of robust remittances and a remarkable pick-up in tourism, and amid an improved security situation, with climate shocks having only temporary negative effects. Meanwhile, the current account deficit has continued to narrow, and inflation has fallen further – supported also by lower global commodity prices. The fiscal situation continues to improve very gradually, and recent liability management operations have substantially lowered near-term financing needs, in the context of sharply lower sovereign spreads."

“Building on this progress, and recognizing El Salvador’s pending macroeconomic and structural challenges, the IMF-supported program aims to strengthen fiscal and external stability and help create the conditions for stronger and more inclusive growth."