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(Bloomberg) – El Salvador’s dollar bonds increased emerging markets on Thursday after legislators approved changes to the country’s Bitcoin law that were needed to get a loan of international monetary funds.
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Government debt was won on the curve, with the notes due to 2054 increasing 2.7 cents from the dollar to 107 cents, according to indicative data collected by Bloomberg. The leap indicated the optimism of investors that the Central American country is near the $ 1.4 billion agreement with the IMF.
“This was the law they needed” to obtain multilateral funding, said Barclays strategist Jason Keene. “We hope to see the approval of the IMF’s board in the coming weeks.”
The changes approved by Congress make it volunteer for companies to accept Bitcoin as a payment method. It also requires that the Government pay for its national and foreign obligations in the currency issued, according to a report from the newspaper La Press Grafica.
The country has 6,049 Bitcoin in its reserves, worth about $ 636 million, and has been added for the last seven days, according to a government government.
El Salvador’s ambassador to the Alkalia of Milena of the United States said that the nation is still committed to daily purchases from Bitcoin and that it would maintain the “ecosystem” that supports digital assets, despite the new legislation.
Self -improve
El Salvador’s dollar debt has obtained a 30% gain for investors over the last twelve months, about three times the average profitability in an emerging market sovereign index.
In 2021, El Salvador became the first country to adopt the cryptocurrency as a legal tender, together with the dollar, instantly gave the fame of President Nayib Bukele as a Pioneer of Bitcoin and put his country. Against the IMF, who opposed the idea.
After years of negotiation, Bukele resorted and accepted the changes in the law to comply with the IMF. This has helped to promote prices in bonds, some of which they now sell above.
While bonds can continue to be done if the country offers more economic reforms, “an IMF agreement is quite valued here,” said Thys Louw, responsible for the Ninety One UK Ltd.
-With the assistance of Jim Wyss.
(Update prices in the second paragraph, add context from the fifth.)
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