What is the IMFs Extended Fund Facility EFF

The EFF is a lending arrangement designed to provide financial assistance to countries facing balance of payments problems with a focus on mediumterm structural reforms

Why is El Salvador scaling back its Bitcoin policies

The IMF has recommended reducing Bitcoinrelated activities to mitigate financial risks and ensure macroeconomic stability

How will the 120 million disbursement impact El Salvadors economy

The funds are intended to support fiscal consolidation strengthen financial buffers and enhance governance contributing to economic stability

What are the structural benchmarks set by the IMF for El Salvador

The benchmarks include reforms in fiscal policy public financial management and anticorruption measures to improve economic resilience

How does the 500 million loan from the InterAmerican Development Bank fit into El Salvadors financial strategy

The loan provides additional resources to support the countrys budget complementing the IMF program and enhancing financial stability

IMF Approves $120M for El Salvador’s Economic Program

🔸Published: 28 May 2025 01:04 PM

🔸Updated: 10 Jun 2025 04:49 PM

IMF agrees to disburse $120 million to El Salvador under a $1.4 billion program after successful review, supporting economic reforms and stability.

The International Monetary Fund (IMF) has reached an agreement with El Salvador to disburse approximately $120 million under the first review of a 40-month, $1.4 billion extended fund facility arrangement approved in February. This disbursement is pending approval by the IMF executive board.

Key Highlights

Program Approval: In February, the IMF approved a 40-month arrangement under the Extended Fund Facility (EFF) for El Salvador, with access equivalent to $1.4 billion. The arrangement aims to strengthen public finances, rebuild external and financial buffers, and improve governance and transparency.
Bitcoin Policy Reforms: As part of the agreement, El Salvador has agreed to scale back some of its Bitcoin-related activities. Acceptance of Bitcoin by private businesses will become voluntary, and public sector engagement in Bitcoin-related activities will be reduced. Tax payments will only be accepted in U.S. dollars going forward.
Additional Financing: In March, El Salvador secured a separate $500 million loan from the Inter-American Development Bank to support its budget.

Conclusion

The IMF's agreement with El Salvador marks a significant step in the country's efforts to stabilize its economy and address macroeconomic imbalances. The reforms and financial support are expected to bolster El Salvador's growth prospects and resilience in the coming years.

Disclaimer: This article is a paraphrased summary of the original Reuters report. The information provided is for informational purposes only and should not be construed as financial or investment advice.