In accordance with the currently effective Law on Currency Settlements and the Law on Central Bank (Bank of Mongolia), the Bank of Mongolia regulates currency circulation, and holds and manages the foreign exchange reserves. However, according to the bill initiator, the rationale for drafting the amendment was the fact that the Bank of Mongolia has no authority to negotiate with a legal entity earning a large amount of foreign currency, except for buying currencies.

Furthermore, the amendment to the Law on Currency Settlements was drafted with the purpose of creating legal arrangements for the Bank of Mongolia to ensure the stability of national currency, hold and manage the foreign exchange reserves, and carry out the cash transactions and settlements of a legal entity with currency earnings from the exploitation of a mineral deposit of strategic importance, in frames of its duty to increase the foreign exchange reserves of Mongolia.

In compliance with the draft amendment, the Bank of Mongolia will be allowed to register the transaction account of a legal entity, which established an investment contract with the Government, exploits a mineral deposit of strategic importance, and with foreign exchange earnings in the amount set by the Bank of Mongolia.

Citizens were allowed to submit suggestions for the draft amendment to the Law on Currency Settlements between May 11th and June 18th, 2018, through the official website of the President’s Office.

Source: president.mn