El Salvador’s net international reserves increased 29% to $4.484 billion during December 2025, reaching their highest level ever and generating positive sentiment for local businesses and foreign investors. In addition to having greater economic coverage to face any unforeseen event, Salvadoran international reserves give greater confidence to entrepreneurs and exporters interested in sustainable investment projects and members of the Salvadoran diaspora.
Net international reserves closed December 2025 at $4,484.49 million, up from $3,482.86 million from December 2024, as reported by the Central Reserve Bank of El Salvador (BCR, for its acronym in Spanish).
During the whole year, Salvadoran international reserves managed to appreciate in value despite a challenging international context characterized by high interest rates and a low liquidity environment. In fact, exceeding $4.48 billion represents an achievement amid a restrictive financial cycle during which many economies have been affected by financial turbulence in international markets.
Why do international reserves matter?
International reserves are essential because they allow countries to cover short-term payment commitments; maintain confidence in economic policy, exchange rate stability, and the smooth functioning of financial markets.
The International Monetary Fund (IMF) defines international reserves as assets that are “held by monetary authorities in freely usable currencies and can be used at their discretion for balance-of-payments purposes”.
Looking at the latest figures released by El Salvador’s monetary authority, the nearly 29% increase in international reserves during 2025 means that El Salvador is in a better position than a year ago to face external contingencies and finance external debts.
Increases in Salvadoran international reserves are positive for foreign investors because they are reflected in lower country risk and contribute to generating a better investment climate. Meanwhile, Salvadoran entrepreneurs need external resilience to develop medium- and long-term projects safely.
International reserves remained stable during the last quarter of 2025
Recorded in September with $4.782 billion, the highest level of international reserves was reached during Q3 of 2025. This level would drop to $4.649 billion in October, $4.518 billion in November, and finally $4.484 billion in December.
Despite easing during the last quarter of 2025, international reserves exhibit signs of orderly conduct instead of abrupt depreciations, showing prudent management by El Salvador’s Central Bank even as liquidity conditions eased during the last months of the year.
Composition and backing of international reserves
El Salvador’s monetary authority reports that $4.347 billion corresponds to foreign currency reserves, totaling $4.484 billion.
This conservative level in composition gives monetary authorities more flexibility when dealing with adverse external shocks and provides strong backing for the rest of the assets that make up international reserves.
More than half of the reserves accumulated during 2025 are backed by a $1.4 billion agreement signed with the International Monetary Fund (IMF).
The IMF program seeks to help rebuild fiscal and external sustainability while also strengthening international reserves.
Fiscal consolidation will focus on guaranteeing fiscal sustainability without jeopardizing economic recovery. The program includes measures specifically designed to increase international reserves.
The program reaches $1.4 billion and will help rebuild fiscal strength
The IMF-backed program seeks not only to rebuild fiscal strength but also external strength by directly increasing international reserves and sending signals to markets.
Although details regarding the effort required to comply with IMF conditions have not yet been released, central bank figures show notable progress in terms of rebuilding international reserves and backing them up with direct financing from the international financial institution.
Implications for diaspora and local investors
The increase in international reserves signals an improvement in El Salvador’s investment climate. International reserves reduce exposure to external shocks and finance external debt, increasing the likelihood of stable growth in the coming years.
Greater accumulation of international reserves:
- Could translate into more stable interest rate conditions and easier access to finance from international markets.
- Allows authorities to have more space for enacting public policies designed to support entrepreneurship, create jobs, and boost productivity.
- Boosts confidence in the local financial sector, a key consideration for foreign investors looking to commit capital during long-term investments.
Higher international reserves can benefit entrepreneurs who are interested in exporting goods or services. External resilience promotes credit conditions and opens the door for greater growth in sectors such as manufacturing, commerce, and tourism.
Conclusion
Strengthening international reserves is a clear signal that El Salvador is committed to consolidating economic resilience against external shocks. Positive net reserves help businesses of all sizes plan for the future, knowing that there is less likelihood of an external crisis due to inadequate liquidity to finance international debts.
El Salvador will continue to reap benefits if macroeconomic policies remain consistent and prioritize the creation of a business-friendly environment where anyone can invest, innovate, and create jobs.