Tuesday, 05 September 2023 03:28

Ministerio de Hacienda accepts private bank proposal to refinance short-term debt

Written by Leydin Sorto

The Asociación Bancaria Salvadoreña (ABANSA) presented last thursday, august 24, to the Ministerio de Hacienda a proposal to reschedule short term debt, transferring it to medium and long term debt with maturities of 2, 3, 5 and 7 years.



The Ministerio de Hacienda accepted this proposal and does not hesitate in assuring that it will have a positive impact on public finances, allowing to reduce the country's public debt through scheduled amortizations, improve the maturity profile of obligations by lengthening their terms and strengthen fiscal sustainability in the medium and long term, as stated in a press release.


The operation will be developed by implementing a plan for new issues, through which the respective payment will be made at the maturity of each security in possession of the participating banks and subsequently the issuance of new securities at a longer term, without increasing the country's debt.

This agreement between the banks and the Government highlights the importance of working in coordination for the benefit of all citizens and strengthening the perception of risk in international markets.

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The economist, Rafael Lemus, in a radio interview, said that it is understandable that private banks do not give details of the proposal, however, the Government handles public information, citizens' money and is obliged to be transparent and accountable. Since in the communiqué the rates to be used are not disclosed either.


Translated by: A.M