- Moody’s lowered El Salvador's long-term, foreign-currency issuer and senior unsecured ratings to Caa1 from B3.
- Noting a “deterioration in the quality of policymaking,” the agency said that the bitcoin law and other measures reflected “weakened governance in El Salvador, raising tensions with international partners – including the United States – and jeopardizing progress toward an agreement with the IMF (International Monetary Fund).”
- The bond ratings agency added that the combined factors could increase the risk to El Salvador’s ability “to access sufficient external financing ahead of bond redemptions,” starting in January 2023.
- The bitcoin law, which goes into effect Sept. 7, requires merchants to accept bitcoin along with the U.S. dollar.
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