El Salvador bond prices dropped as investor fears grow that the country will not reach a potential $1bn loan agreement with the IMF and that the use of bitcoin brings negative credit implications. On Wednesday, thousands of Salvadorans protested President Nayib Bukele’s perceived gain in power, who otherwise was favored amongst the public, after his recent victories in campaign races. The protest also targeted Bitcoin policy, which led to an ATM where Bitcoin can be exchanged for dollars being vandalized. El Salvador’s relationship with the United States had turned sour after the firing of Supreme Court judges in May and the recent ruling that the president can serve two consecutive terms, allowing Bukele to stand for re-election in 2024. Bond prices are now at its lowest since October last year, before they rallied to record highs in the middle of April.
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