IMF approves El Salvador EFF disbursement as reforms advance

Traders Union
All News
Financial Institutions
IMF approves El Salvador disbursement

Highlights

IMF completes second and third reviews of El Salvador’s EFF, unlocking SDR 101.96 million (about U.S.$138 million) in immediate disbursement under the U.S.$1.4 billion program.
El Salvador achieves fiscal consolidation, liquidity, and reserve targets, while advancing reforms in financial sector regulation, transparency, and anti-money laundering, despite missing Bitcoin-related criteria with waivers granted.
IMF emphasizes continued fiscal discipline, unwinding of Bitcoin activities, no further Bitcoin accumulation, and calls for full disclosure of public-sector crypto assets and legal reforms.

Program review unlocks fresh funding

As reported by the International Monetary Fund, completion of the second and third reviews under El Salvador’s Extended Fund Facility allows an immediate disbursement of SDR 101.96 million, about U.S.$138 million. The 40-month arrangement, approved on February 26, 2025, provides total access equivalent to SDR 1,033.92 million, about U.S.$1.4 billion.

The IMF says El Salvador’s economy continues to perform strongly, helped by sustained security improvements and rising investor confidence as the government works to reduce macroeconomic imbalances. Fiscal consolidation advances broadly in line with program goals, while reserve and liquidity targets are comfortably met.

The review also notes progress in financial sector reforms, fiscal transparency, anti-money laundering and counter-terrorist financing measures, and the transfer of majority ownership and control of the government e-wallet Chivo to a private operator. Some performance criteria are not met, including on Bitcoin accumulation, but waivers are granted on the basis of corrective measures and renewed commitments.

Fiscal discipline and crypto rollback remain central

The IMF says the next phase of the program continues to focus on fiscal sustainability, stronger external buffers, financial sector resilience, and governance and transparency reforms. Following earlier delays, pension and civil service reforms are to be pursued to support fiscal consolidation, while protecting priority social spending remains a key objective.

In a statement issued after the Executive Board discussion, First Deputy Managing Director and Chair Dan Katz says real GDP growth exceeds expectations, social outcomes improve, and sovereign spreads decline markedly, although implementation challenges remain in some areas. He adds that decisive program implementation and contingency planning remain essential amid heightened external uncertainty.

The Fund also says El Salvador is continuing efforts to unwind the state’s involvement in Bitcoin-related activities and tighten regulation, supervision, and governance for crypto assets. No further Bitcoin accumulation is envisaged beyond documented donations, while the IMF calls for fuller disclosure of public-sector crypto-asset holdings and changes to the Digital Asset Issuance Law.

In our earlier article on the Zcash Orchard shielded-pool vulnerability, we examined how a long-running code flaw could have enabled counterfeit ZEC creation and triggered a sharp market selloff. We also outlined the project’s emergency response—sealing the old pool and launching Ironwood—and why the episode underscored due-diligence needs around security reviews and trust in privacy-focused crypto assets.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.