The Bank of Mongolia (BoM) purchased 1.4 tons of precious metals in April 2020, up to 6.7 tons since the beginning of the year, the central bank’s Reserve Management and Financial Markets Department reported on Monday. Of these, 5.0 tons were gold and 1.7 tons were silver. This is a threefold increase compared to the same period last year. The average price of gold stood at MNT 149,986.18 per gram. The Parliament and the BoM are counting on the gold sector to increase foreign exchange reserves during the COVID­-19 crisis. For example, within the framework of the Resolution on measures to ensure financial and economic stability, prevent risks and make the digital transition in public services during the COVID­-19 pandemic approved by the Parliament, the Gold­2 program will be intensified, as well as the finance measures to support the gold sector.As the balance of payments deteriorated, official foreign exchange reserves declined by about USD 300 million to USD four billion in March. 2020 State monetary policy guidelines include a steady increase in FX reserves. According to the Bank of Mongolia, the current level of FX reserves is 27.5 percent lower than the National Security Concept and 1.3­2 times lower than the International Monetary Fund (IMF)’s adequacy ratio. Additionally, the USD 1.8 billion Currency Swap Agreement between Mongolia and the People’s Bank of China is set to expire this year. However, negotiations to extend the deal have begun. Mongolia also plans to refinance bonds to be repaid in the coming years.

Published Date:2020-05-05