N.Bayartsaikhan (central bank governor): “Mongolia should draw more direct foreign investment”Politics
Ulaanbaatar /MONTSAME/ A reporter from shuud.mn news website clarified some issues regarding the monetary policy for the next year from the Governor of the Bank of Mongolia, Mr N.Bayartsaikhan.
How well do you think the government budget and the monetary policy for 2017 are coordinated?
The budgetary and monetary policies are well cohered for the coming year. We have worked together on its development. The Financial Stability Council comprises the Minister of Finance, the Governor of the Bank of Mongolia and the Chairman of the Financial Regulatory Commission. The council has deliberately elaborated the monetary policy.
What suggestions and recommendations have the recent International Monetary Fund mission given?
The IMF mission team has left Mongolia this week. This is not a working group to finalize an agreement. They have arrived here to learn the current economic conditions and to compile necessary information. We have collaborated with the team by all possible means and provided the required information. The mission team should report on their work to the IMF Board. If the board consents working with the Government of Mongolia, the IMF will send an agreement working group. We expect the team to arrive in early December. In case the IMF approves our joint draft, the arrangement would be launched as early as possible in 2017.
What measures will be undertaken to stabilize the growing foreign exchange rate?
The increase of foreign exchange rate against Mongolian Tugrug is one the main concerns. The MPP (Mongolian People’s Party) faction in the parliament is addressing this issues. Foreign currency reserves need to be increased in order to stabilize the currency rate. For this, Mongolia should draw more direct foreign investment and cope with the problems that constitute a barrier for investments. Foreign currency flow will also increase as the country encourages exports. On the other hand, the national currency depreciation leads to slowing down imports while activating exports. A long-term and low-interest foreign currencies are indispensable. The central bank is planning to enlarge the reserves through mobilizing these approaches. The rate cannot be mastered under a tough regulation. The economy is facing difficulties. National currency was printed out in huge amount in the recent years which went into market circulation.
Is it possible to reduce the foreign exchange rate?
It is impossible to promise anything at this moment. The MPP faction in the parliament have agreed on working towards intensifying the foreign currency flow in to the national economy. It is crucial to find out fast and effective approach to make sure our decision happen.