{"id":55923,"date":"2022-01-14T16:57:48","date_gmt":"2022-01-14T14:57:48","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=55923"},"modified":"2025-09-04T03:55:37","modified_gmt":"2025-09-04T00:55:37","slug":"moodys-criticises-salvadoran-governments-bitcoin-purchases","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/moodys-criticises-salvadoran-governments-bitcoin-purchases\/","title":{"rendered":"Moody\u2019s criticises Salvadoran government\u2019s bitcoin purchases"},"content":{"rendered":"

Salvadoran government’s bitcoin operations are contributing to the country’s already weak credit rating and signal a rising likelihood of default. Moody\u2019s analyst Jaime Reusche said in an interview with Bloomberg<\/a>.<\/p>\n

He noted that the fact that the government holds part of its assets in the first cryptocurrency \u201cdefinitely adds risk to the portfolio.\u201d He stressed that operations with digital assets pose a threat, especially for a state that \u201cin the past faced liquidity difficulties.\u201d<\/p>\n

The Salvadoran Bitcoin Fund holds 1,241 BTC. Reusche stressed that the scale of government investment is not large enough to deprive it of the ability to meet its obligations. However, in his view, the risk of such a threat would rise if President Nayib Bukele does not adjust its monetary policy.<\/p>\n

\n

\u201cIf the fund\u2019s size grows much larger, it would pose an even greater risk to the issuer\u2019s solvency and fiscal profile,\u201d Reusche said.<\/p>\n<\/blockquote>\n

Moody\u2019s also noted that the high yield (over 35%) Bitcoin bonds<\/a>, issued in November last year, have closed the government\u2019s access to foreign markets, and the absence of an agreement with the International Monetary Fund raises the risk of default in the country.<\/p>\n

In August 2021, Moody\u2019s downgraded El Salvador\u2019s long-term foreign-currency debt rating to Caa1 with a ‘negative’ outlook<\/a>.<\/p>\n

Back in September 2021, El Salvador the law recognizing Bitcoin as an official means of payment<\/a> alongside the US dollar came into force.<\/p>\n

In the same month the government bought 700 BTC<\/a> through a specially created fund<\/a>.<\/p>\n

In October authorities increased<\/a> reserves in Bitcoin by a further 420 BTC, and in the following month purchased<\/a> an additional 100 BTC.<\/p>\n

In December El Salvador bought 21 BTC<\/a>. According to President Bukele, the country invested in Bitcoin to celebrate \u201cthe last 21 days of the 21st century\u201d.<\/p>\n

Subscribe to ForkLog news on VK<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Salvadoran government’s bitcoin operations are contributing to the country’s already weak credit rating and point to an increasing likelihood of default, according to Moody\u2019s analyst Jaime Reusche.<\/p>\n","protected":false},"author":1,"featured_media":55924,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1278,1825],"class_list":["post-55923","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-el-salvador","tag-moodys"],"aioseo_notices":[],"amp_enabled":true,"views":"17","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/55923","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=55923"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/55923\/revisions"}],"predecessor-version":[{"id":55925,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/55923\/revisions\/55925"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/55924"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=55923"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=55923"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=55923"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}