LatinNews Daily - 27 February 2025

*The International Monetary Fund (IMF)’s executive board has approved a 40-month extended arrangement under the Extended Fund Facility (EFF) for El Salvador, worth US$1.4bn. The arrangement was first announced at the end of last year after El Salvador’s government led by President Nayib Bukele agreed to concessions regarding cryptocurrency bitcoin which it adopted as legal tender in 2021, which had strained relations with the Fund. Under the deal reached in December 2024, the Bukele government agreed to make bitcoin acceptance by the private sector voluntary, while “the public sector’s participation in bitcoin-related activities will be confined”. In a statement yesterday, the IMF notes that the arrangement is expected to catalyse “additional multilateral financial support, for a combined overall financing package of over US$3.5bn over the program period”. According to the same statement, under the programme, the primary balance will improve by 3.5% of GDP over three years, “underpinned initially by a rationalization of the wage bill, while protecting priority social and infrastructure spending.”  It adds that “this will be complemented by measures to rebuild reserve buffers and bolster financial stability, as well as actions to strengthen fiscal transparency and anti-corruption and Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) frameworks”.