El Salvador Pays USD 800 Million Bond Despite Bitcoin Critics

President Nayib Bukele questions those who criticized the country's "bet" on the cryptocurrency as it successfully completes debt repurchase operations and pays off bond in full.

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The president of El Salvador, Nayib Bukele, informed yesterday that his country paid an external bond amounting to USD 800 million and did so despite concerns that the country would default due to its “bet on bitcoin (BTC)”.

The Central American nation completed the transfers of the funds with which it paid investors holding the Eurobond due today, January 24, 2023.

The Minister of Finance, Alejandro Zelaya, assured that the payment was made and explained that “El Salvador complied” thanks to the debt repurchase operations made in the last quarter of 2022.

In fact, due to the anticipated operations, the amount was reduced, so that the amount paid was USD 604 million of capital and USD 23 million of interest – as confirmed by Diario Semana.

“In the last year, almost all the international legacy media said that, due to our bitcoin bet, El Salvador was going to stop paying its debt in January 2023. Well, we just paid in full, USD 800 million plus interest,” Bukele tweeted.

The USD 800 million debt maturing today was acquired during the government of Francisco Flores, who governed from 1999 to 2004. While another debt, also for USD 800 million and with a term until 2025, was acquired during the presidency of Mauricio Funes (2009-2014).

Bukele questions those who criticize El Salvador’s bet on Bitcoin

As reported in June last year, renowned economist Steve Hanke relied on data from Visual Capitalist to claim that President Nayib Bukele’s bet on bitcoin placed El Salvador in the number one position of countries with the highest probability of defaulting on its debt.

Read Also: El Salvador received more than USD 115 million in bitcoin remittances in 2022

At the time Hanke pointed out that the country would default on its commitments because the reserves it stores in bitcoin had depreciated by more than 50% due to their falling price. In other words, its investment in the cryptocurrency was in negative with an unrealized loss of more than USD 51 million.

In September, Fitch downgraded El Salvador’s credit rating to CC (very high levels of credit risk), describing a debt default as likely.

Everyone said that without reaching an agreement with the International Monetary Fund we would not be able to pay our 2023 bond due to our Bitcoin losses. All that, creating the narrative that El Salvador was bankrupt.

They lie and lie and lie, and when their lies are exposed, they go into silent mode.

Nayib Bukele, president of El Salvador.

Last year, El Salvador launched an offer to buy back its foreign debt as part of a plan to counter criticism that the country would default on its commitments.

Despite criticism, the Bukele government continues to expand El Salvador’s bitcoin reserves, so much so that last November it said it would start buying 1 BTC per day. And According to the site that tracks the country’s total holdings, as of today the Central American nation owns some 2,516 BTC worth USD 57 million.

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