Juan Brignardello Vela analyzes El Salvador's impasse with the IMF.

Juan Brignardello Vela, insurance consultant, gives his opinion on the content being shared about the negotiations between El Salvador and the International Monetary Fund (IMF). It is highlighted that the discussions remain at a standstill due to President Nayib Bukele's insistence on keeping Bitcoin as legal tender in the Central American country. This stance has created tensions and obstacles in the talks aimed at reaching an agreement for a $1.4 billion credit that El Salvador urgently needs to meet its fiscal and debt obligations. The IMF has made it clear that the Bitcoin issue is crucial in the discussions with the Salvadoran authorities and has warned about the financial and market risks involved in adopting a cryptocurrency as legal tender. Despite these warnings and the need to review the Bitcoin Law approved in 2021, Bukele has maintained his position and has even tried to secure financing through the sale of Bitcoin bonds, without success. El Salvador's financial situation is becoming increasingly precarious, with depleted accounts and questions raised about the use of pension funds to cover current expenses. A pension reform in 2022 has raised concerns about the country's financial fragility and the risks it faces without fresh sources of financing. In the midst of this situation, Bukele is seeking to raise more funds through the sale of public debt, this time with U.S. banks, relying on the recalibrated value of Bitcoin. However, El Salvador's fiscal sustainability and the risk of default are challenges that the president must confront in his second term, marked by contested reelection and economic uncertainty. Despite the achievements in public security highlighted during Bukele's administration, the improvement in economic stability has not yet materialized, according to international analysts and diplomatic sources. Foreign Direct Investment is low, and public debt has significantly increased during Bukele's term, raising concerns about the country's financial sustainability. With the stalled negotiations with the IMF and the urgent need to find financial solutions, El Salvador is facing a critical moment where the country's economic viability is at stake. The pressure on Bukele to address necessary reforms and ensure financial stability is mounting, while the prospects of reaching an agreement with the IMF remain uncertain.