The currency swap arrangement between the Bank of Mongolia (BoM) and the People’s Bank of China, which was scheduled to end in August 2020, is likely to be ex-tended, according to the officials. The agreement allowed the two central banks to swap CNY 15 billion (USD 2.2 billion) for MNT 5.4 trillion. The countries first entered into the swap arrangement in 2011 and it was extended three times in 2012, 2014 and 2017.The extension agreement, which began in Shanghai in August 2019, has been finalized. At the time when the agreement began, the spokesperson said that if the Chinese side rejects the extension proposal, BoM would seek another option to return the received yuan.Governor of the Bank of Mongolia Lkhagvasuren Byadran stated on the situation in December 2019, “The central bank plans to extend swap agreement with the People's Bank of China. The expanded funding program was launched in 2017 and part of the funding worth USD 5.5 billion from donor countries was included as part of the swap agreement. In other words, the extension of the swap agreement to three years in 2017 had been settled under the Extended Fund Facility (EFF) Program. In this regard, the successful implementation of the EFF will have a positive effect on the extension of the term of the agreement. Apart from the inter-bank cooperation, we also find it effective to discuss this within the framework of high state visits.”

Published Date:2020-03-10