Gang truce spurs bond rally in El Salvador

A truce between El Salvadoran gangs that have made the Central American nation among the world’s most violent is fueling a rally in government debt as President Mauricio Funes seeks a permanent deal to end the bloodshed.

Yields on El Salvador’s dollar bonds have fallen to their lowest level in almost a year after two of the nation’s largest criminal groups, Barrio 18 and Mara Salvatrucha, agreed to a 100-day truce on March 9 that has since been extended.

The accord has been praised by Funes and José Miguel Insulza, secretary-general of the Organization of American States, who visited gang leaders in prison on July 12.

Source: Bloomberg