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http://zgm.mn/post/3262/

BoM: Rise in exchange rate will be tempered

BoM: Rise in exchange rate will be tempered
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http://zgm.mn/post/3262/


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.





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BoP deficit reaches USD 665.4 million

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The foreign direct investment totaled USD 491.4 million, decreased by more than 20 percent year on year. The Bank of Mongolia (BoM) emphasized that the Oyu Tolgoi project made up more than 90 percent of the foreign direct investment as of the first quarter of the year.

In the first four months of 2020, the balance of payments (BoP) showed a deficit of USD 665.4 million. The BoP deteriorated by USD 988 million compared to a surplus of USD 322.9 million in the same period last year. As the balance of payments deteriorates, the current account balance deficits USD 389.6 million. At the end of April last year, the current account surplus was USD 689.3 million. Major exports fell sharply due to border restrictions imposed to prevent COVID-19 during the period. Specifically, coal exports at the end of May shrunk 2.6 times than the previous year. In terms of inflows, foreign direct investment totaled USD 491.4 million, which decreased by more than 20 percent year on year. The Bank of Mongolia (BoM) emphasized that the Oyu Tolgoi project made up more than 90 percent of the foreign direct investment as of the first quarter of the year.

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Coal export of SouthGobi Resources rises by 70% in May

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  • HSX listed SouthGobi Resources’ share price rose by 3.57 percent to HKD 0.58 as of Tuesday. Additionally, the company holds mining special licenses of Ovoot Tolgoi underground deposit

During May 1-28, coal export of SouthGobi Resources Ltd. amounted to approximately 0.17 million tons, an increase of 70 percent from the same period in April 2020. To preserve its working capital, SouthGobi had suspended the coal mining operations from February 11, 2020, but in the meantime, the company is continuing its coal blending operations. The company speculated that its existing coal inventories are sufficient to satisfy expected sales demand for at least two months as of the date hereof. SouthGobi had finalized a repayment agreement with one of its biggest suppliers in Mongolia and is discussing repayment agreements with other suppliers. The company is also in the process of finalizing a one-year extension of an existing bank loan in Mongolia to May 2021. HSX listed SouthGobi Resources’ share price rose by 3.57 percent to HKD 0.58 as of Tuesday. Additionally, the company holds mining special licenses of Ovoot Tolgoi underground deposit and Zag Suuj deposit which located in Umnugovi province and exports coal to China through Shiveekhuren border checkpoint. 

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Parliamentary election campaign officially begins

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  • Polling day of the election is scheduled to take place on June 24
  • The regulation specifies that parties, coalitions, and candidates shall organize any events, meetings with voters in online form during the election campaign

The chairperson of a party, coalition, and a candidate, shall be prohibited from participating in independent non-election programs and interviews from the beginning of the election campaign until the end of the voting process.

The parliamentary election campaign officially commenced on Tuesday amid the pandemic. According to the Law on Elections, the election campaign shall start from the day the candidate received an ID card and end 24 hours before the polling day or before 00.00 on the day before the polling day. The election polling is scheduled to take place on June 24. The chairperson of a party, coalition, and a candidate, shall be prohibited from participating in independent non-election programs and interviews from the beginning of the election campaign until the end of the voting process. The fine for violating certain rules is between MNT 20-200 million. During the 2020 Parliamentary Elections, polling stations will be decontaminated to prevent the spread of COVID-19 infection. About MNT 2.5 billion will be spent on providing protective equipment to employees. The government had also passed regulations on preventing infection during the election campaign. The regulation specifies that parties, coalitions, and candidates shall organize any events, meetings with voters in online form during the election campaign. If it is not possible to organize the event online, the meeting places shall be pre-cleaned, disinfected. Also, the distance between participants should be at least 1.5 meters, wearing masks. One-time meetings and gatherings will be held in the hall for a short time. In other words, it should not exceed two hours, according to the law. 

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Six people retested positive for COVD-19, total cases rise to 185

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Director of National Center for Communicable Diseases, Nyamkhuu Dulmaa announced the results of COVID-19 tests and the treatments during the daily briefing of the Ministry of Health (MoH). In accordance with his statement, a total of 365 out of 371 was tested negative for COVID-19 on May 31 also the randomly collected eight samples have been tested negative. However, six citizens who placed under quarantine retested positive for COVID-19. Confirmed cases were all imported from Russia came by the military flight on May 15, bringing the total of confirmed COVID-19 cases to 185.” Of them, approximately 44 citizens have been discharged from hospital and 141 patients have been receiving coronavirus treatment. In terms of the physical condition, 118 is light and the other 23 is a bit severe. Additionally, Director Nyamkhuu Dulmaa emphasized that the coronavirus was detected 18 days after the students were isolated which is the good result of extending the isolation period to 21 days. Currently, NCCD has started to collect samples of 179 citizens who repatriated from Istanbul Turkey in order to retest for infection.