(Bloomberg) – El Salvador dollar obligations increased the most on emerging markets Thursday after the legislators approved the changes in the Bitcoin law of the country which were necessary to guarantee a loan of international monetary funds.
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The public debt won through the curve, with tickets due in 2054 increasing by 2.7 cents on the dollar to 107 cents, according to indicative price data compiled by Bloomberg. The jump reported the optimism of investors according to which the country of Central America is about to conclude the agreement of $ 1.4 billion with the IMF.
“It was the law they needed to adopt” to obtain multilateral funding, said the Stratège de Barclays, Jason Keene. “We expect to see the approval of the IMF council in the coming weeks.”
The changes approved by the congress voluntary so that companies accept Bitcoin as a form of payment. It also forces the government to pay its national and foreign obligations in the currency that has been published to them, according to a report by the newspaper La Prensa Grafica.
The country has 6,049 bitcoin in its reserves, worth around 636 million dollars, and added in the last seven days, according to a statement by the government.
El Salvador’s ambassador to the United States Milena Mayorga said the nation was still determined to make Bitcoin daily purchases and maintain “the ecosystem” which supports digital assets, despite the new legislation.
Output
The debt in El Salvador dollars has given investors a gain of 30% in the last 12 months, or approximately the triple of the average yield of an index of sovereign bonds of the emerging market.
In 2021, El Salvador became the first country to adopt cryptocurrency as a legal tender – with the dollar – instantly giving President Nayib Bukele as a Bitcoin pioneer and opposing his country to the IMF, which opposed the idea.
After years of negotiation, Bukele has sold and accepted changes in law to comply with the IMF. This has helped generate prices in bonds, some of which are now negotiated above the peer.
Although obligations can continue to perform if the country offers new economic reforms, “an IMF agreement is quite appreciated here,” said Thys Louw, a portfolio manager at Ninety One UK Ltd.
– With the help of Jim Wyss.
(Updates prices in the second paragraph, adds the context from the fifth.)
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