El Salvador’s sovereign bonds rallied after a the nations highest economy officials alleviated fears of foreign investors through a conference call. The bond prices had tumbled on Monday after President Nayib Bukel’s party seized control of the country’s Supreme Court. Economy Minister Maria Luisa Hayem, Finance Minister Alejandro Zelaya and Ibrajim Bukele, the president’s brother, spoke with investors to explain the constitutional grounds behind the Supreme Court officials’ ousting. “Judging by the five-point move in the bonds after the call it seems the economic team did a good job in squashing a lot of investors’ fears,” said SMBC Nikko Securities America’s senior emerging market strategist Roger Horn, who hosted the governmental conference call. No comments have yet been released by the President Bukele’s office and the finance ministry.
El Salvador is in talks with the IMF for an over $1bn aid. The news of the removal of Supreme Court judges that has been criticized by US government officials does not augur well for the negotiations and is seen as a trigger for a selloff in the country’s foreign debt on Monday. To date, El Salvador holds $7.7bn in marketable debt outstanding.