IMF negotiates $1.3 billion aid with El Salvador, demands compliance with anti-money laundering, fiscal transparency

Since El Salvador adopted Bitcoin as legal tender, the International Monetary Fund (IMF) has been strongly opposed to the country's policy. However, recently, the IMF has stated that it is providing technical assistance to the government of El Salvador in various ways.

International Monetary Fund (IMF) spokesperson Gerry Rice stated on the 19th that the IMF will continue negotiations with El Salvador on fiscal issues and assist in compiling statistics on Bitcoin usage. Gerry Rice mentioned that IMF staff and El Salvador continue to engage in regular dialogue on key issues highlighted in January of this year.

In January, the IMF urged El Salvador to abandon its Bitcoin law and criticized issues such as Bitcoin bonds and the Chivo wallet. Additionally, the IMF is negotiating with El Salvador on tax and money laundering issues.

Although the IMF disagrees with El Salvador's decision to declare Bitcoin as legal tender, it continues to hold regular meetings with El Salvador representatives.

Gerry Rice stated that El Salvador remains committed to maintaining Bitcoin as legal tender, and the IMF is gathering statistics on Bitcoin usage and relevant information on El Salvador's adoption of Bitcoin as legal tender, providing technical assistance on these topics.

However, Gerry Rice did not specify how the IMF is helping quantify the use of Bitcoin and cryptocurrencies in El Salvador.

One of the three major credit rating agencies, Moody's, in early May downgraded El Salvador's long-term credit rating from Caa1 to Caa3, with a negative outlook, citing lack of transparency in President Nayib Bukele's Bitcoin investments. The main reason for the downgrade is the lack of a reliable financing plan causing the country to continue facing financing pressures and damaging its ability to fully repay debt obligations. Moody's Vice President Jaime Reuschem stated that this is due to El Salvador's lack of precise data on the subject, with only Nayib Bukele's tweets explaining these purchases.

However, according to local media reports, negotiations between El Salvador and the IMF could help reach a $1.3 billion deal. The IMF has requested El Salvador to tighten policies on several issues, including combating money laundering, fiscal transparency, accountability in the use of public funds, and strengthening anti-corruption supervision.

This article is authorized to be reprinted from Horizon News Network