BoM’s gold purchase falls short of previous records
Annual gold purchase almost doubled in 2018, reaching 22 tons
2 долоо хоног, 6 өдөр өмнө
The Bank of Mongolia (BoM) purchased 6 tons of precious metals in the first of 2019, down 846 kg or 12 percent from the same period last year. The decline was mainly due to the expiration of the productive period of low royalty taxes on gold with the 2014 amendments to the Minerals Law, according to the officials. The average price of 1 gram gold at the BoM was MNT 658.22 as of June 28.
The 2.5 percent of discounted royalty on gold mining expired on Jan 1. From then on, 5 to 10 percent royalty taxes on gold mining have been imposed on miners, driving in the central bank’s gold purchase down 71.6 percent yearon-year from January to March.
Mongolia‘s parliament has set the gold royalty at a 5 percent rate to recover the BoM’s gold purchases.
Gold purchase by the Bank of Mongolia has been increasing sharply thanks to the discounted royalty on gold mining, the central bank said in a statement, noting that it has purchased a total of 5.2 tons of gold since the new rate came into force on April 8.
Purchasing gold is said to be one of the key instruments for the Mongolian central bank to increase its official foreign exchange reserves. The central bank of Mongolia purchased only 12.7 tons of gold in 2014. Thanks to the low royalty taxes on gold with the 2014 amendments, its annual gold purchase almost doubled in 2018, reaching 22 tons, according to the BoM.