Fitch Ratings said on Wednesday that he went down to “CCC” from “B-” the international qualifications of issuer risk long-term (IDR) of The Savior citing concerns about the president’s concentration of power Nayib Bukele and the use of bitcoin as legal tender in the Central American country.
The reduction is also due to greater financing risks derived from a greater dependence of the nation on the short term debt and a fiscal deficit at high levels, the agency highlighted in its report.
Fitch said last year’s adoption of bitcoin as legal tender has added uncertainty about the potential of a program of the International Monetary Fund (IMF) that will unlock financing for the nation between 2022 and 2023.
The rating agency also warned about a high concentration of power in the hands of Bukelewhich, he said, has increased the unpredictability of the direction of the public politics.
The Salvadoran government did not immediately respond to Reuters requests for comment.