UPDATE 1-Salvadoran bonds fall despite progress with IMF

  • 5/20/2021
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(Adds bond price decline, context) NEW YORK, May 20 (Reuters) - El Salvador and the International Monetary Fund have made progress discussing policies that could support an IMF program for the Central American country, an IMF spokesman said on Thursday. “The IMF mission feels that we have made progress in discussing macroeconomic and structural policies that could underpin a fund-supported program,” Gerry Rice, a Fund spokesman, said in a scheduled press conference. El Salvador is seeking an over $1 billion program with the Fund, which was put in doubt after U.S. government officials sharply criticized the ousting of five Supreme Court judges and the dismissal of the top prosecutor earlier this month. The oustings are likely to complicate negotiations around good governance clauses the IMF could demand in return for financing. On Tuesday, the United States released a list of Central American politicians seen by Washington as corrupt, which included a close aide of Salvadoran President Nayib Bukele and his former security minister. Bukele was not named. The United States holds the largest voting block at the IMF and despite the progress described by the Fund, Salvadoran bonds fell across the curve on Thursday, with the issue maturing in 2029 down 2.75 cents to 104, yielding 7.9297%. The 2032 fell nearly 3 cents and the 2052 dropped over 3 cents, its yield climbing above 9%. El Salvador has $7.65 billion of marketable debt outstanding, according to Refinitiv data. Reporting by Rodrigo Campos Editing by Chizu Nomiyama and Karishma Singh Our Standards: The Thomson Reuters Trust Principles.

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