{"id":67276,"date":"2022-09-16T15:17:58","date_gmt":"2022-09-16T12:17:58","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=67276"},"modified":"2025-09-07T05:44:53","modified_gmt":"2025-09-07T02:44:53","slug":"fitch-downgrades-el-salvadors-foreign-currency-issuer-default-rating","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/fitch-downgrades-el-salvadors-foreign-currency-issuer-default-rating\/","title":{"rendered":"Fitch downgrades El Salvador’s foreign-currency issuer default rating"},"content":{"rendered":"

International ratings agency Fitch Ratings downgraded<\/a> El Salvador’s long-term issuer default rating in foreign currency from \u201cCCC\u201d to \u201cCC\u201d.<\/p>\n

According to the document, one of the reasons for the country’s limited access to markets and bond repayment problems was recognition of the first cryptocurrency <\/a> as legal tender.<\/p>\n

\n

\u00abPolicy disagreements related to the government’s adoption of Bitcoin reduced the likelihood of a timely deal with the IMF<\/span>,\u00bb Fitch Ratings said.<\/p>\n<\/blockquote>\n

The organization repeatedly criticized<\/a> the government’s decision, and in Januaryrecommended<\/a> removing Bitcoin’s status as legal tender. In 2021 El Salvador requested<\/a> a loan from the IMF of $1.3 billion.<\/p>\n

According to Fitch Ratings, by January 2023 the state would need around $3.7 billion with a financing gap of about $900 million. Experts noted that the situation “makes default to some extent likely”.<\/p>\n

\n

\u00abPolicy disagreements related to the government’s adoption of Bitcoin reduced the likelihood of a timely deal with the IMF,\u00bb Fitch Ratings said.<\/p>\n<\/blockquote>\n

The authorities began buying Bitcoin for the first time in September 2021, creating a dedicated fund of $150 million<\/a>. By the end of the month El Salvador additionally purchased 150 BTC<\/a>, bringing the total reserves to 700 BTC.<\/p>\n

In November another 100 BTC were bought<\/a>, in January 2021 \u2014 additional 410 BTC<\/a> during a market dip. In May 2022 Bukele announced purchases of 500 BTC<\/a>.<\/p>\n

As of writing, El Salvador holds 2381 BTC in the state fund worth $47.2 million, according to Buy Bitcoin Worldwide<\/a>.<\/p>\n

\"Fitch
Data: Buy Bitcoin Worldwide.<\/figcaption><\/figure>\n

In June, amid the decline in the price of the first cryptocurrency below $23,000, the country’s “paper” loss on the 2301 BTC in reserves exceeded $46.1 million<\/a>.<\/p>\n

Earlier Moody’s downgraded<\/a> El Salvador’s long-term foreign-currency rating to Caa1 with a negative outlook. In early 2022, the firm’s analysts noted that purchases<\/a> of Bitcoin exert further pressure<\/a> on the country’s creditworthiness.<\/p>\n

As reported, the head of El Salvador’s central bank, Carlos Acevedo, said that the legalization of the first cryptocurrency \u201ckilled\u201d<\/a> relations with the IMF.<\/p>\n

Read ForkLog’s Bitcoin news in our Telegram<\/a> \u2014 cryptocurrency news, prices and analysis.<\/p>\n","protected":false},"excerpt":{"rendered":"

Fitch Ratings downgraded El Salvador’s long-term issuer default rating in foreign currency from CCC to CC.<\/p>\n","protected":false},"author":1,"featured_media":67277,"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":[18,1278,2102],"class_list":["post-67276","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-bitcoin","tag-el-salvador","tag-fitch-ratings"],"aioseo_notices":[],"amp_enabled":true,"views":"15","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/67276","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=67276"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/67276\/revisions"}],"predecessor-version":[{"id":67278,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/67276\/revisions\/67278"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/67277"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=67276"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=67276"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=67276"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}