Bitcoin

Strike

<p class="is-style-lead">Despite last year’s economic challenges and policy turbulence, El Salvador’s international bonds have rebounded, offering a 60% return in 2023. El Salvador’s international bonds <a href="https://www.reuters.com/markets/quote/.JPMEGDELSR" target="_blank" rel="noopener noreferrer nofollow">posted</a> a 60% return in H1 2023 alone.&nbsp;</p> 
<p>In July 2022, El Salvador had to handle tensions with Washington and the decreasing possibility of getting financing from the International Monetary Fund (IMF). In addition, there was uncertainty surrounding the decision to accept Bitcoin as <a href="https://crypto.news/economical-risk-of-el-salvadors-move-to-make-bitcoin-a-legal-tender/" data-type="post" data-id="14075774" rel="noopener noreferrer nofollow">legal tender</a>. As a result, the value of El Salvador’s bonds declined significantly, dropping to just 25% of their original worth.</p> 
<p> You might also like: <a href="https://crypto.news/strike-moves-global-headquarters-to-el-salvador-expands-bitcoin-payments-to-65-countries/" rel="noopener noreferrer nofollow"> Strike moves global headquarters to El Salvador, expands bitcoin payments to 65 countries </a> </p> 
<p>However, the situation improved in H1 2023. El Salvador initiated two unexpected debt buybacks, alleviating the country’s payment obligations until 2027.&nbsp;</p> 
<p>This move, coupled with appointing a former IMF official as an advisor to the finance ministry, has been perceived favorably by investors.</p> 
<p>The enlistment of ex-IMF official Alejandro Werner rekindled hopes for a prospective&nbsp;<a href="https://crypto.news/imf-leans-towards-crypto-regulation-over-just-outlawing-it/" rel="noopener noreferrer nofollow">IMF</a>&nbsp;deal. His involvement could also lead to more structured policy-making.</p> 
<p>As a result, the value of bonds due in 2025 has surged from around $0.27 a year ago to its current trading price of $0.89.</p> 
<p>Recent&nbsp;<a href="https://www.reuters.com/markets/quote/.JPMEGDELSR" target="_blank" rel="noopener noreferrer nofollow">data</a>&nbsp;also shows Salvadoran bond prices are increasing, with the 2041 bond rising to $0.60. These bonds currently yield between 14% and 18%, marking them as the best-performing sovereign bonds in the first half of the year, with total returns nearing 60%.</p> 
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
 <div class="wp-block-embed__wrapper"> 
  <blockquote class="twitter-tweet" data-width="550" data-dnt="true"> 
   <p lang="en" dir="ltr">You ain't seen nothing yet 😉 <a href="https://t.co/RbSTGKiZDt" target="_blank" rel="noopener noreferrer nofollow">https://t.co/RbSTGKiZDt</a></p>— Nayib Bukele (@nayibbukele) <a href="https://twitter.com/nayibbukele/status/1681677505093091328?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">July 19, 2023</a> 
  </blockquote> 
  <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script> 
 </div> 
</figure> 
<p>According to Aaron Stern from Converium Capital in Montreal, the bond prices in El Salvador did not reflect the actual situation last summer. Market concerns were focused on whether the government could fulfill its responsibilities.</p> 
<p>Stern explains that El Salvador’s bonds offer a competitive value compared to several high-priced bonds in emerging markets.</p> 
<p>According to Shamaila Khan from UBS Asset Management, President Nayib Bukele’s administration has prioritized continued access to the market, a crucial point considering El Salvador operates on a dollarized economy.</p> 
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"> 
 <div class="wp-block-embed__wrapper"> <iframe title="Sovereign Bitcoin Bond in El Salvador w/ Dr. Adam Back and Samson Mow (BTC054)" width="1020" height="574" src="https://www.youtube.com/embed/xByGhXv7rmo?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe> 
 </div> 
</figure> 
<p>By December 2022, El Salvador’s debt-to-output ratio dropped to 77%, the lowest since 2019. Projections suggest a further decrease this year, followed by an uptick to 78% in 2024. The total public debt decreased from $25.4 billion at the end of 2022 to $19.7 billion in May.</p> 
<p> You might also like: <a href="https://crypto.news/el-salvador-and-tether-work-together-to-create-volcano-energy-bitcoin-mining-center/" rel="noopener noreferrer nofollow"> El Salvador and Tether work together to create ‘Volcano Energy’ bitcoin mining center </a> </p>

El Salvador’s international bonds offer 60% return in H1 2023

crypto.news

Other articles published on Jul 20, 2023

Sekuya and Agate to Bring Metaverse Adoption Through Gaming Social World Concept

Kusama Price Prediction: Will Kusama Price Break Out?

Crypto Moon Day 2023

WONDER 23 Klaytn Foundation joins WONDER Staking

Ultimate Global Crypto Tax Guide 2024

FedNow to Launch this Month and Enable 24/7 Instant Fund Transfers

Join our free newsletter for daily crypto updates!