BoM: Rise in exchange rate will be tempered
3 долоо хоног, 6 өдөр өмнө
MNT/USD rate hiked to USD 2,679
Following Mongolia’s inclusion on Financial Action Task Force FATF)’s grey list, the foreign exchange rate appeared to rise in the domestic market. In the last week, Mongolian tugrik (MNT)’s exchange rate against the US dollar (USd) weakened by USd 20, reaching USD 2,679. Accordingly, the Bank of Mongolia (BoM) organized an auction and supplied more than uSd 70 million to the market to reduce the exchange rate movements. Chairman of the Financial Regulatory Commission (FRC), Davaaasuren Sodnomdarjaa said, “Over 50 NBFIs are operating at Naiman Sharga exchange. The exchange rate fluctuated last weekend, and we are investigating the causes. However, the exchange rate is likely to be stabilized. We will work to warn those people who attempted to make a profit taking advantage of the greylisting.” After the pending assessment program of IMF completes, Mongolia will accept investment worth at least USD 700 million. Under such circumstances, the USD exchange rate is expected to lower, according to economists. The foreign currency flow may depend on whether the Oyu Tolgoi (OT) project’s second phase of construction will continue in the coming year. Last year, the project accounted for more than 70 percent of foreign direct investment in Mongolia.In other words, the majority of economists believe that Mongolia may not lack foreign currency as long as the OT project progresses. As of August, BoM’s foreign exchange reserves amounted to USD 3.6 billion, which is the highest level since 2016. BoM also explained the MNT depreciation is temporary and will be tempered.