Meeting held to discuss economic difficulties caused by COVID-19 spread

2020-03-05 20:59:49

Mongolia is on heightened state of readiness for prevention of COVID-19 infection, following the decision made by the State Emergency Commission. Due to the state, some entities are facing economic difficulties. In regard with the current condition, Speaker of the Parliament G.Zandanshatar held a meeting with some ministers, chairpersons of standing committees and heads of the Bank of Mongolia and the Mongolian National Chamber of Commerce and Industry (MNCCI) to discuss ways to overcome economic difficulties.  

At the meeting, in line with the outbreak of new coronavirus, the Central bank authorities were instructed to take measures for lowering loan interest by reducing its policy rate as well as to free small and medium business runners from loan interest burden in the near future.  

"The central banks of the countries are taking measures such as to soften their monetary policy and keep the policy rate unchanged. Therefore, the Central Bank is to convene the Monetary Policy Committee meeting next week to put its proposal to cut policy rate by 0.5 percentage point. We also consider that loan and funding products could become more accessible and loan interest could be lowered if the required reserve amount as well as policy rate are reduced. As the World Health Organization warns that dirty banknotes may be spreading coronavirus, the BoM is fulfilling works to provide new banknotes for its money supply to commercial banks and destroying dirty bills," central bank governor B.Lkhagvasuren said.  

The MNCCI has conducted a survey among over 1000 entities on how preventive actions for COVID-19 infection are affecting their businesses. According to the survey, 57.4 percent of them answered ‘highly affected’ and 32 percent answered ‘moderately affected’. It gives direct impact to tourism, construction, education and service provider sectors.

They also answered service and goods supply lowered by 60 percent and 15 percent of them answered they are in pressure for money. Mining, IT and health sectors’ revenue has been declined as well. Aside from it, 66 percent of total entities answered loan payment and its term and rate are the main difficulties facing in their businesses.

Representatives of the entities emphasized the importance of reducing bureaucracy in government services and promptly providing services related to foreign trade and its permission.