BlockBeats reports that El Salvador is expected to reach an agreement with the International Monetary Fund (IMF) in the next two to three weeks to receive $1.3 billion. This loan program will require reforms to its pioneering use of Bitcoin as legal tender and government deficit reduction. An IMF mission is in San Salvador to finalize the agreement details.
The deal is expected to unlock another $1 billion in loans from the World Bank and another $1 billion from the Inter-American Development Bank over the next few years. The loan package requires IMF board approval, marking El Salvador’s return to the international financial system after years of relative isolation.
The agreement will require El Salvador to waive its legal obligation for businesses to accept Bitcoin as a means of payment and make acceptance voluntary. The government will also commit to reducing the budget deficit by 3.5 percentage points over three years through spending cuts and tax increases, and pass an anti-corruption bill and increase foreign exchange reserves.
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