El Salvador congress approves use of SDRs for early debt repayment

National Palace of El Salvador, San Salvador
National Palace of El Salvador, San Salvador

El Salvador’s legislature ordered the central bank to convert more than $360 million worth of IMF special drawing rights (SDRs) into dollars and transfer these to the finance ministry, as the country struggles to convince investors it will repay its debts.

The funds will be used to buy back sovereign bonds ahead of their 2023 and 2025 maturation dates. But many analysts warn the measure will have little effect given the high debt load and deep governance issues.

The legislature, in its July 26

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