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El Salvador Achieves Historic Savings of $745 Million in Public Debt Repurchase.

El Salvador has made significant strides in managing its public debt, achieving historic savings of $745 million through three debt repurchase operations conducted between April and November 2024. Marlon Herrera, the Director of Investment and Public Credit, shared this accomplishment with the Finance Commission, highlighting the success of the country’s strategic debt management.

These operations, which are part of a broader strategy initiated in August 2022, have been made possible by special provisions that empower the Ministry of Finance to optimize the country’s debt profile. The repurchases have allowed El Salvador to reduce outstanding debt by $1.76 billion, equivalent to 15% of the total debt, leading to substantial savings through lower interest payments and improved financial stability.

The first debt repurchase took place in August 2022, marking El Salvador’s return to the international capital markets. In 2024, three additional repurchase operations were executed: one in April, another in August, and the most recent in November. The operations were funded by securities issues approved by the Legislative Assembly, which raised $1,000 million in February, $1,500 million in May, and $1,000 million in November. While part of these funds were allocated to other state obligations, the debt repurchases have played a crucial role in reducing financial risks, creating “fiscal space,” and improving the country’s reputation in international markets.

This achievement is part of a broader strategy led by President Nayib Bukele to stabilize and strengthen El Salvador’s economy. By implementing innovative financial measures, the government aims to reduce the nation’s debt burden, optimize public resources, and improve its standing with international markets and credit rating agencies.

The success of these debt repurchase operations not only reflects the government’s commitment to fiscal responsibility but also marks a critical step towards ensuring a more solid and reliable economic environment for El Salvador’s future.