Sunday, June 4, 2023

Salvadoran authorities prohibit publication of IMF report

He International Monetary Fund (IMF) published that the Salvadoran authorities “have not given their consent for the publication of the staff report and the related press release” of Article IV. This is an evaluation that the IMF makes to its member countries on an annual basis that implies “a comprehensive analysis of the situation.”

The IMF staff made the consultation, that is, the analysis, and met with officials on January 24 and made a statement on February 13, where they warned about some issues that the country should review to head for a better path in terms of tax and financial

After this statement, the IMF makes an exhaustive report on the points, which the Salvadoran government has not given its endorsement for it to be published. Being the member country of the IMF, it has that power, although it limits the information so that the issues or critical points of the national economy analyzed by the IMF technical staff are not fully known.

In the February statement, which is more general, the IMF warned that there is no fiscal sustainability and that the debt “remains high and is on an unsustainable path.” The Savior it does not have the capacity to enter the international debt markets and its financing options are increasingly shorter.

“With the payment of a Eurobond in January 2023, EMBI spreads have continued to fall, but the Ministry of Finance continues to lack access to international capital markets,” the IMF noted.

The review of bitcoin is still on the table for debate and the mission stressed the need to make government transactions transparent in the cryptocurrency.

Another of the high points in the IMF statement and which has been pointed out by numerous organizations is that “reserve requirements have been halved since 2019, and the liquidity buffers of the entire system have decreased. As a result, banks’ exposure to government (debt) has increased, reaching 11.1% of total bank assets.

Recently Nick Chalk, director of the Western Hemisphere of the IMF, clarified that they have not received an official request from the country to negotiate a SAF Expanded Facility mechanism and that they are in preliminary talks for a mechanism, although he did not clarify which one.



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