The International Monetary Fund approved a $138 million to $140 million disbursement to El Salvador under its $1.4 billion Extended Fund Facility program. While the fund praises El Salvador's strong economic growth and security improvements, it granted a waiver for the country's breach of Bitcoin accumulation criteria. The IMF expects El Salvador to scale back its Bitcoin experiment, halt public accumulation, and fully unwind its exposure to the state-sponsored Chivo wallet.
Details of the IMF loan program
- ▪El Salvador's Extended Fund Facility program with the International Monetary Fund targets a primary fiscal surplus of 3.7% of GDP by 2027
- ▪The approved $138-140 million disbursement made on October 1, 2026 is part of a larger $1.4 billion Extended Fund Facility program established between El Salvador and the International Monetary Fund
- ▪El Salvador's $1.4 billion Extended Fund Facility program with the International Monetary Fund aims to reduce the country's public debt to 80% of GDP by 2030
- ▪The International Monetary Fund Executive Board approved a disbursement of approximately $138 million to $140 million to El Salvador on October 1, 2026
Changes to state Bitcoin activities
- ▪Salvadoran President Nayib Bukele announced in 2022 that El Salvador would purchase one Bitcoin per day, though the International Monetary Fund stated in September 2026 that the country was not using public funds for these purchases
- ▪The International Monetary Fund stated that El Salvador's state involvement in Bitcoin-related activities is being unwound, with no further Bitcoin accumulation planned beyond documented donations
- ▪The International Monetary Fund granted El Salvador a waiver for breaching performance criteria related to Bitcoin accumulation under its loan agreement
- ▪The International Monetary Fund expects El Salvador to fully unwind its remaining exposure to Chivo, the state-sponsored Bitcoin wallet launched in 2021
Economic performance and security gains
- ▪El Salvador's economy grew by 5.1% year-over-year in the second quarter of 2026, driven by an 11.2% expansion in the construction sector
- ▪The International Monetary Fund projected a real GDP growth of 4.5% for El Salvador in 2026, following a 3.9% economic expansion in 2025
- ▪The International Monetary Fund credited El Salvador's economic expansion to rising investor confidence and security improvements, noting the homicide rate fell from approximately 54 per 100,000 people in 2018 to around 1.8 in 2024
Debatable claims
- ▪The IMF is justified in conditioning loans on El Salvador restricting Bitcoin
- ▪El Salvador's decision to make Bitcoin legal tender has done more harm than good
- ▪The IMF's waiver of El Salvador's Bitcoin loan breach was justified
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