El Salvador's President Nayib Bukele speaks during a ceremony to lay the first stone of a new public hospital, in San Salvador, El Salvador June 15, 2023.
El Salvador's debt repurchases last year and a still-light payments calendar were behind a rally that shrank the premium to hold Salvadoran government debt (.JPMEGDELSR) from above 3,200 basis points in July last year to about 1,000 a year later.
Katrina Butt, a senior economist at AllianceBernstein, said that even as the size of the investment is yet to be made public, "Google Cloud's announcement could significantly improve macro fundamentals in El Salvador over time".
"Though outperformance of El Salvador has been impressive we think the carry is still attractive given the low default risk."
BNP's Marshik said the next leg of the rally could come from good news on El Salvador's relationship with the International Monetary Fund - where the United States is the largest shareholder.
Persons:
Nayib Bukele, Jose Cabezas, Nathalie Marshik, Katrina Butt, Shamaila Khan, BNP's Marshik, Siobhan Morden, Rodrigo Campos, Nelson Renteria, Angus MacSwn
Organizations:
El, San Salvador , El, REUTERS, SALVADOR, Reuters, BNP Paribas, Google, United States, U.S . Embassy, Peace Corps, Central American, U.S, Asia Pacific, UBS Asset Management, International Monetary, IMF, Santander US Capital Markets, Thomson
Locations:
San Salvador ,, San Salvador , El Salvador, El Salvador, America, Peace, El Salvador's, Asia, United States