Amb. Ina Marciulionyte on the Future of EU-Mongolia Ties www.thediplomat.com

In the last several years, Mongolia’s relationship with the European Union – as opposed to purely bilateral diplomacy – has become more important to Ulaanbaatar’s engagement with Europe. The EU is stepping up its game in the Indo-Pacific as well, signing a historic free trade deal with India that is poised to alter economic flows in the region. 

The Diplomat spoke with Ambassador/Head of Delegation of the European Union to Mongolia Ina Marciulionyte on Mongolia-EU relations, collaboration projects, and what’s next the relations in a quickly changing geopolitical environment. 

Mongolia and the EU celebrated their 35th anniversary in 2024. How would you assess the past bilateral relations? What were the past shortcomings and how can relations be augmented?

Over the years, the EU and Mongolia have built a strong relation of confidence and have demonstrated solidarity on several occasions. For instance, the EU has actively supported Mongolia during the COVID-19 crisis, as well as provided emergency funding in response to the 2024 dzud and drought that affected hundreds of thousands of herders. We had done so already in 2017.

In 2017, the EU opened a diplomatic mission in Ulaanbaatar, which allowed me to meet with government ministers, Members of Parliament, local governors, and business representatives. I had also regularly met with Mongolian citizens, youth in particular, who are a large part of the Mongolia’s population. 

In addition, Mongolia also shares democracy and the acknowledgement that fundamental freedoms must be protected. These values are shared and align with the EU. 

Since 2024 – which marked 35 years of diplomatic relations – we have started exchanges on peace and security, a priority for Mongolia as for the EU. With the support of the EU Foreign Policy Instruments facility, a group of Mongolian peacekeepers was trained in Slovenia on the gender dimension of peacekeeping operations. And the EU wishes to engage more closely in the Ulaanbaatar Dialogue on Peace and Security in Northeast Asia. 

Last but not least, the Mongolia-EU cooperation projects support Mongolia in achieving Sustainable Development Goals and gaining economic and political independence in relation with its geography.

What are some of the current EU projects being implemented in Mongolia, particularly in the energy sector and renewable energy?

Our works prioritize sustainable development, economic development, and democracy in Mongolia. As part of our project, the EU currently has a significant project to implement the Forest Partnership signed by President of Mongolia Khurelsukh Ukhnaa and the president of the European Commission in 2022. The partnership aims at improving the sustainable management of forests in Mongolia and at modernizing  agriculture, especially cashmere and the meat value chain. I believe that it is urgent to reduce grazing pressure on Mongolian steppes that are in great danger of disappearing, leaving a desertified landscape instead. 

Mongolia is also hosting the COP17 of the UNCCD this coming August and is expected to showcase Mongolia’s efforts in managing rangelands and nomadic herding. 

The EU also supports Mongolia’s shift of energy production from brown to green by financing a transmission line between Sainshand and Choir in the Gobi area, together with connecting solar and wind farms to the rest of the grid. We are looking at further investments in the sector in the short term, with possibilities for generation, transmission, storage but also energy savings with better insulation. That being said, the EU works closely with EBRD and the European Investment Bank to support Mongolia’s effort in this matter.

The EU and India recently signed a free trade agreement, which has been dubbed the “mother of all deals.” What does this entail for countries like Mongolia, in terms of establishing new trade patterns and being flexible in times of uncertainties? 

The message EU and India gave with the strategic agreements they signed, including the Joint Strategic Agenda and the Security and Defense Partnership, is that they both aim at stability and predictability within the international rules-based order with the U.N. at its center. The free trade agreement gives a strong message on the importance of diversifying our supply chains. I hope it will be an inspiration for Mongolia as regards the importance of strengthening the U.N. in these difficult times. In addition, on trade, [the FTA holds lessons for] creating new opportunities for Mongolian exports without endangering local companies and fostering energy independence through investment in renewable energy. 

The zero-duty EU export scheme, called GSP+, which applies to Mongolia is not yet used to its maximum possibilities. The conclusion of an EU-Mongolia agreement on Geographical Indications would enable Mongolia to sell its cashmere at a higher price in the EU and find markets for high-quality products such as leather, honey, and other agricultural or artisanal goods. And it is really a time for Mongolia not only to speak about renewable energy but to effectively launch more projects: the potential in this immense country is bright and the energy independence is within reach. Time has come to raise the game.

Mongolia has been implementing what is known as “third neighbor” foreign policy. In your view, how can Ulaanbaatar’s multilateralism be bolstered with newer mechanisms? Considering Mongolia’s interest in establishing robust economic links with its third neighbors, what is the likelihood of new mechanisms, such as one linking the EU, India, and Mongolia? 

Mongolia does not need new mechanisms nor to reinvent the wheel: it needs investments from more countries. In my view, the main obstacles that prevent more foreign investments are the small size of Mongolia’s population, the geographical location that makes trade complicated including because of logistics, legal uncertainties on investment rules, and weaknesses of the judiciary. 

On the latter issue, the EU implements a number of projects in Mongolia. In October 2025, we have organized the first ever EU-Mongolia Business and Investment Forum that has attracted over 700 participants from Europe and Mongolia, including 70 European companies, most travelling from Europe and many for the first time. Mongolia’s Prime Minister Zandanshatar Gombojav (Editor’s note: Zandanshatar resigned in May 2026) opened the forum, and several ministers as well as Members of Parliament attended as panelists. One of the major success of the forum was that the European Investment Bank and Mongolia signed an agreement that opens the door to 1 billion euros in European investment. 

The EU has a strong, integrated mechanism for combating misinformation, disinformation, and cyber crimes. How is the EU assisting Mongolia to thwart such challenges, especially in an era of digitalism? 

Disinformation is not something new, but indeed new technologies have helped it to spread and artificial intelligence widens the foreign information manipulation and interference (FIMI) toolkit. In a country like Mongolia where social media play a major role, it has become a source of concern as it may weaken democracy though election interference or biased protests coverage, and facilitate violation of fundamental rights such as the rights to personal integrity and privacy. 

Mongolia will have important elections in 2027 and 2028, and indeed one can worry about foreign interference. The EU has built up capabilities to identify, analyze and respond to FIMI since 2015 to address Russian disinformation campaigns in the context of Russia’s aggression against Ukraine. For instance, the EU vs Disinfo website includes the world’s largest public archive of pro-Kremlin disinformation. 

The EU and EU member states had some projects in Mongolia already. The EU would be happy to support Mongolia in building further its counter-FIMI agenda.

You have an extensive experience working with diverse cultures. What is one thing that stands out to you about Mongolia’s culture? 

I am impressed by how authentically welcoming Mongolian people are with foreigners. I noticed that in particular during my visits in the provinces: each time, I meet with fantastic people, who are eager to show what they do and to understand what the EU does in Mongolia. 

I am also deeply touched by Mongolia’s rich cultural heritage and the attachment to the traditions of Mongolians, something that communism has tried to erase. Fortunately, traditions such as Tsagaan Sar and Naadam continue to play a central role in society, even for younger generations. But a lot of work is needed to revive this heritage and to ensure continuity. I believe that Mongolia’s third neighbors should do more cultural diplomacy.

Guest Author
Bolor Lkhaajav
Bolor Lkhaajav is a researcher specializing in Mongolia, China, Russia, Japan, East Asia, and the Americas. She holds an M.A. in Asia-Pacific Studies from the University of San Francisco.

Policy Support to Be Provided for Localization of Japanese Investment Companies in Mongolia www.montsame.mn

Seddorj Renchinbyamba, Chair of the Standing Committee on Economics of the State Great Khural (Parliament) of Mongolia, received a delegation led by Hideyuki Nakano, Parliamentary Vice-Minister for Internal Affairs and Communications of Japan, who is on an official visit to Mongolia.

During the meeting, the parties highlighted that Mongolia and Japan established diplomatic relations 54 years ago, which have since expanded and developed into a Strategic and Comprehensive Partnership. As an example of this cooperation, they noted that the National Statistics Office of Mongolia and the Statistics Bureau of Japan signed a Memorandum of Understanding in 2017, and cooperation continued uninterrupted even during the pandemic period.

The visiting side expressed interest in learning from the good practices of Mongolia’s National Statistics Office, which is recognized across the Asia-Pacific region and collects data from multiple sources, including mobile phone and satellite data. They also raised issues related to the arrival of Japanese trainers who are expected to work in Mongolia in June.

Chairman Seddorj conveyed greetings from Speaker of the State Great Khural Byambatsogt Sandag, who has been elected to parliament for a fifth term, and expressed gratitude for Japan’s continued support through the dispatch of experts to assist Mongolia’s statistical sector. He emphasized the effectiveness of holding regular bilateral meetings and noted that the Standing Committee places particular focus on enhancing the benefits of the Mongolia–Japan Economic Partnership Agreement and providing policy support to facilitate the localization of Japanese investment companies in Mongolia.

The sides exchanged views on the implementation and outcomes of memoranda of understanding and intergovernmental agreements concluded between the two countries.

The meeting was attended by Batdavaa B., Chairperson of the National Statistics Office of Mongolia, and Masaru Igawahara, Ambassador Extraordinary and Plenipotentiary of Japan to Mongolia, along with representatives of the Embassy of Japan, according to the Press and Public Relations Department of the State Great Khural.

Ranks High in Financial Service Accessibility Indicators www.montsame.mn

The Financial Regulatory Commission (FRC), in cooperation with the Alliance for Financial Inclusion (AFI), is organizing an international training titled “Integrating Gender-Inclusive Finance into Supervisory Frameworks.”

During the opening, FRC Chairman Jambaajamts Tundev emphasized that gender equality remains a key priority in expanding access to financial services. He noted that Mongolia ensures an appropriate gender balance within company boards under the Corporate Governance Code, conducts assessments of financial inclusion and citizens’ financial health, and adopts data-driven policies and decisions.

He further highlighted that regulatory measures supporting gender equality, increasing women’s economic participation, and financing projects through the capital market have enabled domestic companies to issue social and sustainability bonds. Among these is one of Central Asia’s first gender bonds, demonstrating regional leadership. Mongolia also joined the Women Entrepreneurs Finance Code last year, with 28 non-bank financial institutions and four professional associations currently participating, reflecting growing awareness and engagement among stakeholders.

Chairman Jambaajamts stressed that building an inclusive financial system requires high-quality data, sound policymaking, and strong cooperation among partners. In this context, the international training provides an important platform for sharing experience, learning, and improving regulatory and supervisory practices.

The training aims to strengthen Mongolia’s financial sector regulatory and supervisory capacity in line with international standards while contributing to the development of a women-friendly, inclusive, and fair financial system. More than 70 representatives from financial regulatory bodies and central banks of over 40 countries are participating in the training. Participants are exchanging experience on gender-responsive supervision, risk-based oversight, consumer complaint resolution mechanisms, financial literacy, fraud prevention tools, and the application of artificial intelligence and SupTech solutions.

The FRC will also present Mongolia’s financial market policies, initiatives to enhance women’s financial inclusion, reforms in market conduct supervision, and consumer protection measures. The program further provides technical knowledge and skills related to supervisory implementation, risk assessment matrices, inspection methodologies, market monitoring tools, and the systematic integration of gender considerations into supervision.

Batchimeg Batbold, Director of Market Research and Development Department at FRC, stated that the training focuses on improving financial service accessibility for women entrepreneurs and promoting gender balance through experience sharing among policymakers and regulators. She noted that Mongolia ranked ninth globally in financial service accessibility in 2025, placing it alongside developed countries. While access to financial services among individual clients shows little disparity by gender, age, or education level, women entrepreneurs often receive similar services but with differing financing volumes. To address this gap, several bonds have been issued, financing more than 300 entrepreneurs.

The Alliance for Financial Inclusion is an international organization comprising central banks and financial regulatory institutions from over 100 developing countries, working to expand financial services to underserved populations. The Financial Regulatory Commission joined AFI in 2010 and participates in seven of its working groups. The international training is being held from May 4–8 in connection with the 20th anniversary of the establishment of the FRC.

MNT 86 Billion in Tourism Loans Approved, Parliament Hears www.montsame.mn

 The Subcommittee on Tourism Development of the State Great Khural (Parliament) heard a briefing on concessional loans aimed at supporting the tourism sector at its meeting on May 5, 2026.

The presentation was delivered by Batchimeg V, Head of the Tourism Policy and Coordination Department at the Ministry of Culture, Sports, Tourism, and Youth. She noted that a total of MNT 250 billion in concessional financing has been allocated for the sector this year. In this framework, enterprises have submitted loan applications totaling MNT 2 trillion to 10 commercial banks. Currently, loan requests from 198 enterprises amounting to MNT 404 billion are under review by the banks.

She added that the line ministry is required to conclude monitoring agreements for loans exceeding MNT 500 million. To date, 28 enterprises have submitted requests to sign such agreements, of which 13 have been finalized while 15 remain under review. Overall, loan approvals totaling MNT 86 billion have been granted to 42 enterprises, with MNT 5.9 billion disbursed so far.

According to the Press and Public Relations Office of the State Great Khural, the Minister of Culture, Sports, Tourism and Youth, the Governor of the Bank of Mongolia, and representatives of the Ministry of Finance met last week with executives of the 10 commercial banks. They agreed to establish a supervisory working group by order of the central bank governor, amend the general financing agreement, and publicly disclose information on enterprises that have signed monitoring agreements or received loans.

Secondary Market Liquidity Remains Limited www.montsame.mn

MONTSAME National News Agency, together with MICC Mongolia International Capital Corporation, presents a weekly overview of Mongolia’s domestic capital market and economy.

 Weekly Capital Market and Economic Overview

(2026.04.27–2026.05.01)

 MONGOLIAN STOCK EXCHANGE

A total of 5.19 million securities units, worth MNT 14.48 billion, were traded on the Mongolian stock exchange throughout the week. Invescore NBFI JSC, Khan Bank JSC, Trade Development Bank, Mongolian Stock Exchange JSC, and Golomt Bank JSC led by trading value. During this period, a total of one block trade was conducted.

A total of 115,000 shares of Invescore NBFI JSC (INV) were traded at MNT 10,560 per share, amounting to MNT 1.2 billion.
 
Last week, indices on the Mongolian Stock Exchange maintained their upward momentum, signaling a continued recovery trend. The TOP-20 Index rose by 1.04%, the MSE A Index by 0.59%, and the MSE B Index by 1.09%, indicating stable buying activity in the market. Notably, the rise in the MSE B Index suggests increased activity in the small-cap segment, with growth beginning to broaden across the market.

 These movements reflect easing pressure following the ex-dividend period and indicate that the market may be transitioning from a short-term recovery phase to a more stable growth stage. However, the rally is not yet fully broad-based, and secondary market liquidity remains limited. As such, the current uptrend can still be viewed as a continuation of a post-correction recovery, with future direction likely to depend heavily on broader participation and improved liquidity.

 MONETARY POLICY COUNCIL TIGHTENS REQUIREMENTS ON FOREIGN FUNDING

 At its meeting on April 28, 2026, the Monetary Policy Council of the Bank of Mongolia decided to revise reserve requirements related to banks’ foreign funding. Starting October 1, 2026, 25% of foreign currency bonds and loans with maturities between 360 days and three years raised from international markets will be subject to reserve requirements.

 Policy rationale and scope:

Rising external dependence: The share of foreign funding in banks’ total liabilities has steadily increased in recent years, raising external vulnerability.
Shift toward long-term stability: The measure aims to discourage short- and medium-term external borrowing while promoting more stable, long-term funding.
Reducing FX and maturity mismatches: Foreign currency borrowing used for local-currency lending creates currency and maturity risks; the policy seeks to mitigate these.
Stress test results: According to MPC stress tests, banks remain adequately capitalized and resilient even under major macroeconomic shocks.
Lower cyclical risk: The financial cycle is assessed to be more balanced compared to previous periods, allowing room for further macroprudential measures.
 
The decision comes amid increasing reliance on short- and medium-term external financing. The MPC emphasized that the measure is intended to encourage a shift toward longer-term, more stable funding structures and reduce associated risks.

It also highlighted ongoing global economic uncertainty, noting that the cost and availability of external financing may fluctuate in the short term, potentially affecting capital flows.

 Overall, this policy adjustment represents a macroprudential step aimed at reducing excessive reliance on foreign funding and strengthening financial system stability. Further policy measures will be implemented gradually depending on macroeconomic and financial conditions.

 Investors holding bank stocks listed on the Mongolian Stock Exchange are advised to closely monitor upcoming quarterly reports for changes in funding structures, external borrowing levels, and associated costs. The 25% requirement is expected to increase the cost of short- to medium-term foreign funding and may put pressure on banks’ funding structures and lending rates, particularly for those with higher reliance on external financing.
LEGAL FRAMEWORK TO ENABLE INHERITANCE OF “ERDENES TAVANTOLGOI” SHARES

At its regular meeting on April 29, 2026, the Government approved a resolution outlining certain measures related to shares of “Erdenes Tavantolgoi” JSC. The resolution instructs relevant authorities to organize the legal transfer and inheritance of 1,072 shares held by 132,203 deceased citizens, as recorded in the Central Securities Depository as of December 31, 2025.

 How to inherit the shares:

Notary process: Heirs (family members or relatives) must first establish inheritance rights through a нотари.
Securities account: Once notarized, the shares must be transferred and registered under the heir’s name at the Central Securities Depository.
Dividend entitlement: After the transfer, heirs will also gain the right to receive accumulated dividends from previous years.
Currently, unpaid dividends from prior years have been held in state accounts. Completing the inheritance process will allow eligible citizens to claim these accumulated earnings.
Timeline: After preparatory work is completed, the process is expected to begin on June 1, 2026.
 
The Cabinet Secretariat noted that this resolution also supports preparations for “Erdenes Tavantolgoi” to become a publicly listed company by 2026.

Importantly, the resolution does not permit the buying or selling of shares. Under Government Resolution No. 181 (2012), restrictions on transferring or disposing of shares remain in place until secondary market trading is officially opened.

 BANK OF MONGOLIA PURCHASES 1.06 TONNES OF PRECIOUS METALS IN APRIL

 In April 2026, the Bank of Mongolia purchased 1,057.7 kg of precious metals, bringing total purchases since the beginning of the year to 4.3 tonnes. This marks a 30.7% increase compared to the same period last year, indicating stronger gold supply activity.

Regionally, purchases were concentrated in specific areas: the Bayankhongor branch acquired 1,020.3 kg, while the Darkhan-Uul branch purchased 124.2 kg, suggesting supply concentration in certain regions.
The Bank of Mongolia’s purchase price is linked to international market prices. In April 2026, the average gold purchase price stood at approximately MNT 541,552 per gram. Elevated global gold prices continue to incentivize domestic supply and encourage producers to participate more actively in the market.

The increase in precious metal purchases supports Mongolia’s foreign exchange reserves and contributes positively to macroeconomic stability. Gold supply is expected to remain stable in the near term.

Pasture vegetation growth is poor in 40% of total area www.gogo.mn

According to the Information and Research Institute of Meteorology, Hydrology and Environment, as of April 30, pasture vegetation growth was good across all of Dornod, most of Darkhan-Uul, Khuvsgul, and Selenge, parts of Khentii, Khovd, Umnugovi, and Bulgan provinces, as well as some soums of Tuv. In other areas, growth was assessed as moderate.

However, pasture conditions were very poor in more than 20% of the total area and poor in 40%. These conditions were observed in Dundgovi and Sukhbaatar, most of Zavkhan, Uvurkhangai, Govisumber, Uvs, Khovd, Govi-Altai, Bayankhongor, Arkhangai, and Umnugovi, as well as some soums of Khentii, Tuv, and Dornogovi provinces.

Compared with the same period last year, pasture vegetation emergence is later than usual in most areas of Bayan-Ulgii, Khovd, Khuvsgul, and Dornogovi provinces. 

4.8-magnitude earthquake strikes Zavkhan soum, Uvs province www.gogo.mn

A 4.8-magnitude earthquake struck Zavkhan soum in Uvs province at 7:30:38 a.m. on May 4, 2026.

Provinces and soums near the epicenter of the earthquake:

50km southwest of the center of Tsagaankhairkhan soum, Uvs province
55km northeast of the center of Zavkhan soum, Uvs province
58km south of the center of Khyargas soum, Uvs province

"BRITISH DAYS" Fair | 21–23 May 2026 www.britishbusinesscentre.com

Three days of everything British — all in one place:

Franchise opportunities & direct introductions to UK companies
Guidance on studying in the UK
Quality English language learning options in Mongolia
Direct-from-manufacturer UK vitamins on sale (Healthilife)
Showcase & sales of British-branded products and services
Pre-registration for the "Doing Business with Mongolia" seminar and business programme in London (December)
Art exhibition by Hon. Artist D. Batbileg
Competitions & prizes: "Who Sings Best?", "English Public Speaking", and Quiz/Q&A — 10 winners selected
Dates & time: 21–23 May | 10:00–20:00
Location: Baruun 4 Zam, British Business Centre

Open to everyone

Businesses trading with or representing UK products/services are invited to partner with us!

Special thanks to the British Embassy in Mongolia!

British Business Centre
www.britishbusinesscentre.com
management@britishbusinesscentre.com
Tel: +976 7755 2002 / +976 9906 6062

Over 50% of Foreign Nationals Reside for Employment Purposes www.montsame.mn

The Immigration Agency reported that 52.4% of foreign nationals residing in Mongolia for private purposes are staying for employment.

Specifically, 17,944 foreign citizens are working in Mongolia at the invitation of 2,189 enterprises and organizations. Of these, 39.3% are employed in construction, installation, roads, bridges, and infrastructure development; 25.4% in geology, mining, petroleum, and energy; and 17.1% in manufacturing and services.

Under the Law on the Legal Status of Foreign Nationals, up to 3% of Mongolia’s population—approximately 107,000 foreign citizens—may reside in the country for private purposes, including no more than 35,000 citizens from any single country. As of April 30, 2026, 34,241 citizens from 133 countries were residing in Mongolia for official and private purposes. Foreign nationals residing for private purposes account for 0.94% of the total population.

Residence permits under the employment (C) category are issued based on a work permit granted by the General Office for Labor and Welfare Services. In addition, employers hiring foreign workers are required by law to pay a monthly workplace fee equivalent to twice the minimum wage. This fee is allocated to the Employment Promotion Fund to support domestic employment. The fund accumulated MNT 124.9 billion in 2024 and MNT 189.8 billion in 2025.
 

Mongolia poised to lead development of capital markets in CAREC–ASEAN region www.report.az

Mongolia is ready to lead the capital markets development initiative in the CAREC-ASEAN region, Mongolian Deputy Finance Minister Khulan Bat-Erdene said at a capital market seminar held during the 59th Annual Meeting of the Asian Development Bank's Board of Governors, Report informs.

"In the CAREC-ASEAN region, we constantly talk about economic growth, potential, and economic diversification. Therefore, I view the capital market as the most equitable and transparent mechanism for wealth distribution. It is also a way to unlock economic potential through the use of market instruments, not just fiscal measures, budgetary funds, or conventional lending. In this regard, the capital market offers enormous opportunities, and Mongolia is ready to lead this initiative," the deputy minister stated.