Bukele reacts to Moody's warnings over El Salvador's bitcoin buying spree

El Salvador's President Nayib Bukele responded on Twitter on Sunday to a warning from rating agency Moody's over the country's bitcoin investments.

On Sunday, financial website Investing.com claimed that Moody's was going to downgrade El Salvador's rating because of the country's bitcoin trading. Bukele responded to the warning by tweeting: "Breaking: El Salvador DGAF," a slang way to say the country does not care.

BREAKING: EL SALVADOR DGAF https://t.co/VuJ25PcvQL

— Nayib Bukele 🇸🇻 (@nayibbukele) January 17, 2022

On Tuesday, Moody's investor service clarified that Bukele responded to an inaccurate tweet and that El Salvador's rating has not changed.

However, the rating agency told Bloomberg that El Salvador's bitcoin holdings "certainly add to the risk portfolio," especially for "a government that has been struggling with liquidity pressures in the past."

Moody's downgraded the country's rating in July of last year, placing it at a high risk of defaulting its debt. El Salvador has an $800 million bond maturing in 2023. The rating agency worries that the country, which already has liquidity issues, will not be able to pay its debts. 

El Salvador currently owns around 1,319 bitcoins, according to Bloomberg. "If it gets much higher, then that represents an even greater risk to repayment capacity and the fiscal profile of the issuer," Moody's said.

El Salvador started buying bitcoin with public funds in September 2021 and has continued to buy the cryptocurrency when its price falls. Bukele's buying spree of bitcoin subjects the country to the cryptocurrency's extreme volatility, claimed Bloomberg. Recent drops in the cryptocurrency have cost El Salvador around $10 billion.\

El Salvador was the first country to make bitcoin legal tender. Bitcoin is trading at $41,931.09, according to Coinbase.