Fitch cited policy unpredictability stemming out of the increased concentration of power in the presidency, weakening institutions, and the legalization and adoption of Bitcoin as the reason for lowering the rank.
Reasons Behind The Move
As per the official post, “heightened” financing risks arising from growing dependency on short-term debt reflects Fitch’s move of downgrading El Salvador.
It also pointed out the limited scope of the country’s domestic market financing as well as uncertain access to additional multilateral funding and external market financing considering high borrowing costs. Increased concerns with respect to debt sustainability due to the expected increase in GDP next year after modest improvement in 2021 is yet another factor.
It stated,
“In Fitch’s view, weakening of institutions and concentration of power in the presidency has increased policy unpredictability, and the adoption of bitcoin as legal tender has added uncertainty about the potential for
We współpracy z: https://cryptopotato.com/fitch-downgraded-el-salvadors-rating-citing-bitcoin-adoption-risks/
