In its most recent rating action statement, Fitch Ratings, a credit rating agency that offers credit ratings for global capital markets, has lowered El Salvador’s credit rating. El Salvador’s Issuer Default Rating (IDR) was originally assigned the letter B. This score showed that, although having a considerable danger of default, the government still had “a narrow margin of safety.”
El Salvador’s new CCC rating means that the country has reduced its safety margin and now stands at a significant risk of failing to meet its long-term obligations. According to Fitch, the downgrading was based on a number of issues. One of the primary causes that prompted the IMF to express worry is President Nayib Bukele and his Bitcoin intentions.
Fitch also believes that these risks will become apparent in 2023, when El Salvador will be required to service more than $1.2 billion in debt. According to the document, the first payment from this sum is an $800 million Eurobond due in January 2023. Finally, the business anticipates a $2.5 billion financing need for El Salvador in 2023.
. El Salvador's debt repayment capacity is currently rated CCC by Fitch, a level worse than B on the firm's scale.){kind=link}