August 2, 2020 / 12:13 AM / 5 days ago

Politics scuppers El Salvador deal for $250 million IDB loan

FILE PHOTO: El Salvador President Nayib Bukele speaks at a news conference during a nationwide quarantine as El Salvador's government undertakes steadily stricter measures to prevent the spread of the coronavirus disease (COVID-19), in San Salvador, El Salvador May 26, 2020. REUTERS/Jose Cabezas

SAN SALVADOR (Reuters) - El Salvador on Saturday failed to approve a $250 million loan from the Inter-American Development Bank (IDB) aimed at tackling the coronavirus pandemic after Congress and President Nayib Bukele could not agree on terms before a deadline expired.

According to the government, the IDB offered El Salvador the loan at an interest rate of 2.1% with a 5-1/2 year grace period, giving the country until the end of July to approve it.

However, Bukele has been at loggerheads with Congress for much of the pandemic over how to manage the crisis.

Both the government and Congress said the other side had failed to resolve differences over where the money would be spent by the time the deadline expired on Friday night.

It remained to be seen whether the Central American country would have another chance to secure the loan.

Reporting by Nelson Renteria; Editing by Cynthia Osterman

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