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http://zgm.mn/post/5713/

BoM decides to remain policy interest rate at 9%

BoM decides to remain policy interest rate at 9%

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http://zgm.mn/post/5713/

On Friday, the Monetary Policy Committee (MPC) of the Bank of Mongolia (BoM) convened and remained the policy interest rate at 9 percent. For the purpose of providing the stability of banking systems, the committee decided to decrease the dollarization of the bank's resources and maintain the relative return of the tugrik, and a macro-prudential policy decision was made to reduce the MNT required reserve premium as a percentage of high-interest foreign currency deposits and interest-bearing foreign currency current accounts. Previously, the Monetary Policy Committee held an unscheduled meeting on the 13th of April 2020. The Committee had decided to lower the policy rate by 1 percentage point to 9 percent and to extend the maturity limit on consumer loans up to 12 months for lenders experiencing difficulty in their loan repayments. Annual headline inflation reached 6.4 percent nationwide and 6.9 percent in Ulaanbaatar city as of February 2020. The demand induced inflation is expected to be subdued as the economic growth slacks this year. The supply-driven volatility in inflation is anticipated to decline if the supply of some imported foods remains stable, along with a falling domestic price of fuel following the drop in global oil price. MPC also updated its forecast for a 0.9 percent contraction this year. The World Bank, the International Monetary Fund, the Asian Development Bank have been updated expectations of Mongolia’s economic growth previously. In addition, ADB emphasized that Mongolia needs sustainable reform in a newly released report. In accordance with the prediction, by focusing on improving macroeconomic management, strengthening human development, expanding international trade, and diversifying the economy based on the knowledge and experience gained in the mining and other sectors, Mongolia can build a stable and inclusive economy. The report also stressed that increasing private sector participation in infrastructure sectors such as transport, telecommunications, and energy will contribute to Mongolia’s long-term sustainable economic growth. Concerning the revised forecast by ADB, Mongolia’s economy will shrink by 1.9 percent in 2020 and increase by 4.7 percent in 2021.

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TDB and UBC bank consolidated

  • The Trade and Development Bank and Ulaanbaatar City Bank, both have over 20 years of experience in the market, have combined operations on June 29. It can be called a historic event

All assets, liabilities, equities, and branches of Ulaanbaatar City Bank (UBCB) will be consolidated into the Trade and Development Bank (TDB), taking effect from June 29th, the TDB announced on Monday. TDB will further serve all UBCB clients; Bank of Mongolia approved the consolidation on June 23, 2020. Ulaanbaatar City Bank, named after the capital of the country, has been operating successfully for 21 years since 1999, professionally and swiftly providing comprehensive banking and financial services to its customers. The bank has been proudly making the list of the TOP-100 enterprises, announced by the MNCCI every year, as well as is one of the six systemically important banks in the banking system, as defined by the Bank of Mongolia. Strengthened human resources, expanded customer base, and adequacy of bank branches significantly contribute to achieving our strategic goal of closely serving our customers, TDB said in an announcement. 

Mr. Orkhon Onon, Chief Executive of Trade and Development Bank talked about further operations on the merge of the banks. 

-Two influential banks have officially consolidated in the banking system. Could you provide the related information on this?

-About Trade and Development Bank (TDB) and Ulaanbaatar City Bank, both have over 20 years of experience in the market and they have combined operations on June 29. It can be named a historic event. In accordance with the permission issued by the Bank of Mongolia (BoM) on June 23, 2020, all assets of Ulaanbaatar City Bank together with the branch and settlement center have been merged with the Trade and Development Bank.

-More interestingly, the two merged banks both have a potent and authoritative status in the banking system.

-Of course, that is why I called this event momentous. In the past period, such a large corporation has never appeared in the banking system. Both two banks have large scales. Additionally, defined by the Bank of Mongolia, two systemically important banks with more than 5 percent of the banking sector have joined on a voluntary basis. It is the very first combination of TDB.

-How will customers feel about this merging process and what is the further plan?

-Presumably, TDB’s primary capital is customers and we have arranged and prepared all procedures for customers to accept this change in the easiest and clearest way. In other words, all clients and partners will be customers of the Trade and Development Bank from June 29 without touching the services and conditions of Ulaanbaatar City Bank. As a result of the influential bank combination in the banking system, the Trade and Development Bank has expanded to 400 employees, 33 branches and settlement centers, and more than 1,900 merchandising organizations. This activity is beneficial for both sides as well.

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Members of new parliament officially receive ID cards

Newly elected parliamentary members were handed over ID cards on June 29 in the government house of Mongolia. Moreover, in line with the General Election Commission’s (GEC) statement, no discrepancies have been reported in the 164 polling stations. Following the June 24 polls, a census was carried out in 846 polling stations or 42 percent of the 2,070 polling stations nationwide. This is mainly driven by parties, coalitions, and candidates who have filed complaints with the President and the General Election Commission regarding the results of the 2020 parliamentary elections. In accordance with the President’s obligations to the General Election Commission, an additional manual census was conducted in the five provinces and five district polling stations mentioned in the requirement. These include 22nd-23rd constituencies of Bayanzurkh district, Chingeltei, Sukhbaatar, Songinokhairkhan, and Khan-Uul districts, as well as the first constituency of Arkhangai province, the 7th constituency of Dornod province, the 10th district of Uvurkhangai province, the 11th district of Umnugovi province also, the 19th district of Darkhan-Uul province.

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Rio Tinto reaches agreement on domestic power supply with Mongolia for OT

  • Rio Tinto will amend its current power supply agreement with the Mongolian government by March 2021
  • TRQ’s share price has been heavily volatile amid the successes and struggles at OT, last year rising significantly on positive developments

Rio Tinto Ltd had reached an agreement with Mongolia to domestically supply power to its Oyu Tolgoi copper-gold mine through a state-owned coal-fired power plant at Tavan Tolgoi, the company reported on Monday. The Government of Mongolia owns 34 percent in the Oyu Tolgoi project, while Rio Tinto’s majority-owned Turquoise Hill Resources (TRQ) has a 66 percent stake in the project. The mining giant said in a state ment it will amend its current power supply agreement with the Mongolian government by March 2021, under which the government will begin construction of the coal-fired power plant by July 2021. The plant, being built to supply power to the Oyu Tolgoi project, is expected to be commissioned within the next four years. Until the commissioning of the state-owned plant, power supply to the mine and the underground project will continue under the current terms. In March, Rio had flagged slowing down operations at the Mongolian mine due to coronavirus restrictions. Mongolia and Oyu Tolgoi LLC reached an agreement on the State-owned power plant, Turquoise Hill Resources and Rio Tinto announced Sunday, affirming the April decision by the Mongolian cabinet over the power supply for the mine. Mongolia will fund and construct the power plant at Tavan Tolgoi, while the existing power source agreement was amended. The power plant will deliver “reliable” power for open-pit operations and project development Turquoise Hill Resources said. TRQ’s share price has been heavily volatile around the successes and struggles at Oyu Tolgoi, last year rising significantly on positive developments while plummeting by nearly half just months later. OT currently uses imported power and both the Government of Mongolia and Oyu Tolgoi have committed to extending the current arrangement to ensure continued stable power is supplied to the mine and underground project until the State-Owned Power Plant is commissioned and is able to supply stable, reliable and continuous power. Arnaud Soirat, Copper and Diamonds chief executive of Rio Tinto Ltd, said, “This agreement provides a potential pathway to securing a domestic power supply for the Oyu Tolgoi mine and underground project for the benefit of all shareholders and the wider community. We look forward to working with the Government of Mongolia to progress the solution.

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Manual census conducted in 127 polling stations across Ulaanbaatar

In accordance with the requirements of some parties, coalitions and independents nominated for the 2020 Parliamentary elections, and the official letter delivered by the President of Mongolia to the General Election Commission (GEC), and the Capital City Election Commission is reviewing the ballots in some polling stations. The recount took place on June 27-28. Head of the Public Administration Department, Governor’s Office in Ulaanbaatar City, and Chairman of the Capital City Election Committee Mr. Ganbold informed about the census. He said, “In Nalaikh, Baganuur and Bagakhangai districts, a total of 26 polling stations were set up, and 13 polling stations were inspected and the count reached 50 percent. In Bayanzurkh district’s 22nd constituency, a total of 47 polling stations were operated and 11 polling stations were counted. We are conducting a census. ”Ulaanbaatar has a total of nine constituency committees and 451 polling stations. On June 24, the auditorial manual count carried out in 102 polling stations. This is 23 percent of all ward committees. On June 27-28, a control census has been conducted in 127 polling stations in the capital city. Members of the district and polling station committees that organized the election were compiled preliminary reports at the Districts’ Election Commission.