According to the Bank of Mongolia (BoM), the amendments followed the international practice of central banks and created a favorable legal environment the BoM by improving independency and decision making process. The amendments will help implement the monetary policy, regulate the banking sector monitoring, limit budgetary activities of the BoM that are not in line with its objectives and is set to be effective until April 1 2018. The law is expected to contribute to long-term economic growth by creating legal environment for development and implementation of proper monetary policy.

MP Terbishdagva Dendev said, “The central banks of other countries are focusing on price stability, which is significant in the long-term. Unfortunately, the article concerning the price stability has been disapproved by the Parliament.” MP Damba-Ochir Dorjdamba stated, “The amendments to the Laws on Central Bank will ensure financial stability during economic crisis. The BoM’s decision will now require approvals of four councils and one committee, retracting some of the Governor’s authority. Furthermore, the BoM will be able to monitor commercial banks and take timely measures. In addition, the BoM is now prohibited to issue loans for social welfare programs and projects. Only commercial banks will issue loans to the Government if necessary.”

Tugsbilig.B