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.
The agreement is pending approval by the IMF’s Executive Board and is dependent on the implementation of agreed-upon conditions.
Progress and Fiscal Reforms
According to a joint statement from IMF officials Rodrigo Cubeddu and Luis Torres, El Salvador’s early performance under the program has been strong. The country has met key fiscal and reserve targets while steadily advancing governance and financial resilience reforms.
“The authorities have made significant progress in implementing their economic reform plan under the IMF-supported program. Most program targets set for the first review were comfortably met, and implementation of the structural benchmarks is progressing well,” said the officials.
They added that the nation’s economy continued to expand, supported by investor confidence and resilient remittance inflows. The statement also emphasized the importance of maintaining momentum on fiscal consolidation and structural changes to address macroeconomic imbalances and support sustainable growth.
Under the deal, El Salvador will continue its fiscal tightening measures. These include cuts to the public wage bill, restrained current spending, and upcoming civil service and pension system updates. The efforts will be supported by the upcoming Fiscal Sustainability Law, with the government also planning to increase deposits at the country’s central bank to boost external reserves.
IMF Doubles Down on Bitcoin Stance
Despite the progress, the IMF reiterated its concerns about El Salvador’s Bitcoin strategy. It stated that efforts were being made to ensure the government does not add to its BTC holdings.
“On Bitcoin, efforts will continue to ensure that the total amount of Bitcoin held across all government-owned wallets remains unchanged,” the statement read.
Additionally, steps are underway to phase out public sector involvement in the Chivo wallet by the end of July.
In December 2024, the two parties struck a $1.4 billion deal that included conditions to limit the nation’s crypto-related activities. The deal required BTC’s acceptance in El Salvador’s private sector to remain voluntary and restricted public sector involvement in related transactions.
These conditions were later integrated into national policy through amendments to the Bitcoin Law approved by El Salvador’s Congress. The IMF Executive Board then approved the financing deal in February 2025, allowing an initial disbursement of $120 million, subject to approval.
Despite the required limitations on crypto engagement, El Salvador’s Bitcoin Office has continued its strategy of buying one BTC per day. As of May 28, 2025, the country holds approximately 6,190 BTC, valued at around $675 million.
President Nayib Bukele has also publicly stated that cryptocurrency remains a central part of his vision for the nation.
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