IMF reaches staff-level agreement for $140M aid to El Salvador

El Salvador just cleared a significant hurdle in its ongoing relationship with the International Monetary Fund. IMF staff have reached a staff-level agreement on the country’s second and third reviews under its 40-month Extended Fund Facility, unlocking roughly $140 million in additional funds once the Executive Board gives its stamp of approval.

What the deal actually covers

The EFF arrangement was approved in early 2025 with a total value of $1.4 billion, equivalent to SDR 1,033.92 million, or 360% of El Salvador’s IMF quota. The first review was completed successfully, resulting in an initial disbursement of roughly $113 million to $120 million. The second and third reviews hit delays, originally planned for 2025 and early 2026, as issues like pension reform and structural benchmarks remained unresolved. As of August 2026, only the first review had been publicly finalized, leaving subsequent disbursements in limbo.

Beyond the $140 million in direct funds, the broader EFF program is designed to catalyze more than $3.5 billion in additional multilateral support.

The Bitcoin balancing act

Under the terms of the EFF, El Salvador has made Bitcoin acceptance voluntary for businesses and consumers, walking back the original mandate that required merchants to accept it. The government has also been gradually winding down the Chivo Wallet, the state-backed digital wallet that was central to the country’s initial Bitcoin rollout. El Salvador’s treasury held 7,762 BTC as of early September 2026, built through a strategy of daily purchases. The IMF framework explicitly includes measures to mitigate risks associated with Bitcoin, reflecting the fund’s cautionary stance toward sovereign crypto adoption.

Fiscal targets and structural reforms

The EFF program targets a 3.5% of GDP improvement in the primary balance over three years. Reserve accumulation and governance reforms, including transparency and anti-corruption measures, round out the structural benchmarks that the country needs to meet to keep disbursements flowing. The fact that the staff-level agreement covers both the second and third reviews simultaneously suggests that meaningful progress has been made on multiple fronts, including the politically sensitive area of pension reform.

What this means going forward

For El Salvador, the immediate benefit is $140 million in fresh funds, plus the credibility signal that comes with staying on track in an IMF program. The next milestone to watch is the Executive Board’s formal vote on the staff-level agreement. Assuming it passes, El Salvador will have successfully navigated three reviews of its EFF program while holding 7,762 BTC in its national treasury.

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