Fitch downgrades El Salvador's credit rating to 'junk' over risk of bitcoin as fiat currency

Time：2022-02-09 Source： 1273 views Trending Copy share

Fitch further downgraded El Salvador's sovereign debt rating from "B-" to "CCC" from "B-" on Wednesday, citing the huge risks posed by the country's adoption of bitcoin as legal tender. Fitch also said El Salvador's "increased reliance on short-term debt increases funding risks" ahead of its $800 million global bond due in January, which was one of the reasons for the downgrade.

The unorthodox policies of El Salvador's President Nayib Boukli have increased the country's risk in the eyes of investors and rating agencies.

"Weakening institutions and centralization of presidential power increase policy unpredictability, while the adoption of bitcoin as legal tender adds to the uncertainty of an IMF program that will open financing in 2022-2023," Fitch said in a statement. certainty.

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