Ruling party sends 2019 Monetary Policy Guidelines for final discussion
DP faction leaves session over SME Development Fund scandal
3 сар, 3 долоо хоног өмнө
Parliament’s plenary session began with a protest of the Democratic Party (DP) faction yesterday. The DP members hung up banners, declaring not to attend plenary sessions and standing committee meetings until the MPs involved in SME Development Fund scandal are ousted and left the session. Without the DP faction, the remaining Parliament members held the first discussion on 2019 Monetary Policy Guidelines, during which the Governor of Bank of Mongolia (BoM) Bayartsaikhan Nadmid informed that the bank has injected USD 720 million into the foreign exchange (FX) market so far this year and is planning USD 1 billion currency intervention before the end of 2018. This is expected to reduce the weakening MNT rate at about 5 percent fluctuation. “The Law on Currency Regulation, which is currently under discussion by the Parliament, includes an article that states transactions of Oyu Tolgoi and other private entities that has stability agreement with the Government shall be made through BoM accounts. The approval of the bill will help grow FX reserves,” addressed Mr. Bayartsaikhan.
The Parliament members further touched upon eight percent mortgage loan program, highlighting that the mortgage loan repayments currently stand at 98 percent from total outstanding loans. The related standing committee noted the low accessibility of mortgage loan in 2017-2018 and suggested to increase the program financing in 2019. In turn, the Governor of the BoM Bayartsaikhan noted the difficulty for the BoM to independently settle the mortgage loan issue and reminded that the International Monetary Fund suggested to transfer the management of mortgage program to the Government starting from January 2019. He also highlighted that the BoM is currently making an effort in further reducing commercial bank lending rate, which was recently lowered from 21 percent to 17.8. Additionally, the BoM is operating under MNT 3 trillion deficit and Mr. Bayartsaikhan informed that the only measure of maintaining the balance is to issue Government securities and bonds; however, considering the current situation, he announced that the BoM will repay its debt from operational revenue.