tl;dr
El Salvador and the IMF have reached a staff-level agreement on the first review of the country's 40-month Extended Fund Facility arrangement, pending IMF Executive Board approval and condition implementation. El Salvador has shown strong early performance by meeting key fiscal and reserve targets a...
El Salvador and the International Monetary Fund (IMF) have reached a staff-level agreement on the first review of the country’s 40-month Extended Fund Facility (EFF) arrangement, pending approval by the IMF’s Executive Board and the implementation of agreed conditions.
The IMF praised El Salvador for strong fiscal performance, noting the country met key fiscal and reserve targets and advanced governance and financial resilience reforms. Authorities have made significant progress on their economic reform plan, comfortably meeting most program targets and progressing well on structural benchmarks. Economic expansion continues, supported by investor confidence and resilient remittance inflows.
Fiscal consolidation remains a priority, with measures including public wage bill cuts, restrained current spending, and updates to civil service and pension systems, all supported by a forthcoming Fiscal Sustainability Law. Additionally, the government plans to increase deposits at the central bank to bolster external reserves.
Despite this progress, the IMF reiterated concerns about El Salvador’s Bitcoin strategy. The Fund emphasized efforts to keep government Bitcoin holdings unchanged and to phase out public sector involvement in the Chivo wallet by the end of July 2025. These measures align with a $1.4 billion deal struck in December 2024, which included conditions limiting crypto-related activities, such as making Bitcoin acceptance voluntary in the private sector and restricting public sector crypto transactions. These conditions led to amendments in the Bitcoin Law approved by El Salvador’s Congress.
Nonetheless, El Salvador continues to purchase one Bitcoin daily through its Bitcoin Office. As of late May 2025, the country holds approximately 6,190 BTC, valued around $675 million. President Nayib Bukele maintains that cryptocurrency remains central to the nation’s vision, underscoring its pivotal role despite IMF reservations.