El Salvador buys back its debt while the British pound plummets to a record low

Sterling hit its lowest level against the dollar on Monday on fears of a deep recession in Britain after new Finance Minister Kwasi Kwarteng unveiled a controversial tax cut plan.

The pound fell as low as $1,035 in Asian morning trading, according to Bloomberg data, with some commentators warning it could reach parity with the US currency.

Investors began selling pounds on Friday after Kwarteng unveiled plans to cut taxes to revive Britain’s ailing economy.

Selling continued on Monday after he said he intended to make further cuts, despite the uproar it caused in London markets, where the FTSE 100 fell nearly 2%.

In El Salvador, its debt bonds were priced higher after the successful repurchase, which prompted the launch of a second offer in eight weeks to acquire all of the remaining debt corresponding to the 2023 and 2025 issues, as announced by the president. Nayib Bukele

A second debt repurchase operation, announced by the President of the Republic, Nayib Bukele, after the successful early purchase of debt executed by the Salvadoran government, where he acquired part of the bonds maturing in 2023 and 2025, for a total of $565 million.

«The operation was so successful that we have decided to launch another offer for the rest of the 2023 and 2025 bonds. Always publicly, transparently, and at market prices at the time of the next repurchase, which will take place in eight weeks,» President Bukele posted on Twitter.

President Bukele highlighted that the favorable reception by investors to the early purchase offer of securities with maturities in 2023 and 2025 means savings of $275 million, which makes it attractive to launch a second operation to reacquire the totality of the two closest debt issues.