El Salvador’s international bonds have made a comeback in 2023, returning 60% year-to-date. This is a remarkable turnaround from the economic challenges and policy turbulence the country faced last year.
Bonds issued by El Salvador saw a startling loss in value of 75% in July 2022. This was a direct consequence of the nation’s decision to accept Bitcoin as legal cash, which triggered a response from the IMF and other international financial agencies.
Investors have praised the recent steps El Salvador has taken to improve its financial status. A former IMF official’s appointment as an advisor to the finance ministry and the nation’s intention to buy back $1.2 billion of its debt are both considered indications that the nation is serious about putting its finances in line.
The hiring of Alejandro Werner is a positive sign for El Salvador’s economy. Werner’s experience and expertise could help the country get its finances in order and attract much-needed foreign investment.
Now that investors are more convinced that El Salvador will be able to pay its debt, they are prepared to pay more for Salvadoran notes. This is encouraging for the economy of the nation and might encourage much-needed foreign investment.