BoM injects USD 850 million throughout this year to stimulate economy www.zgm.mn
The Bank of Mongolia (BoM) pumped USD 850 million into the banking system to intervene in the growing USD rate this year. Officials are highlighting the fact that the net amount of the first few months of this year is nearing the full year funds of 2018.
The BoM is continuing to inject liquidity to strengthen the weakening exchange rate of the MNT, as well as holding a policy to increase foreign currency reserves. Although the FX reserves have increased by 3-4 times over the past three years, international organizations previously estimated FX rates to stabilize if the reserve expanded by another USD 1-2 billion. Accordingly, the greenback reserves, which currently stands at about USD 3.8 billion, need to to reach at least USD 5.5 billion in the following years.
As of April 18, the BoM purchased USD 660 million from "Oyu Tolgoi", "Erdenet Mining Corporation" and "Erdenes Tavan Tolgoi" LLC this year.
The strategic deposits have a benefit of bringing in foreign currency into the economy that has no available room for making profits except from exporting minerals. Therefore, the private sector representatives were able to raise funds via loan notes in the international market and to expend the accumulated exchanges in the domestic financial markets for the past few months.
Trade and Development Bank of Mongolia, the first private entity that brought in FX notes from foreign investors to Mongolia, is aiming to raise USD 300-400 million bonds from the international market. Tavan Bogd Group is also planning to draw an investment with a net amount of USD 150 million.
Published Date:2019-06-05