Mongolia to decide on Stand-By deal with IMFPolitics
Ulaanbaatar /MONTSAME/ According to the Minister of Finance, the International Monetary Fund (IMF) mission will probably resume their activity in Ulaanbaatar on the negotiation of Stand-By Arrangement sometime this week.
Mongolia officially requested financial aid from IMF on September 30, 2016. The representatives of IMF came to Mongolia on the request, having met with the heads of Bank of Mongolia, Ministry of Finance and corresponding Parliamentary standing committees. The mission revisited last month to negotiate on the Stand-By program, but delayed due to public holidays.
Therefore, the next potential meeting is projected to discuss the guidance on which IMF program needs to be implemented, and what changes are needed in Mongolia. Whether if Mongolia will be included in the Stand-By arrangement or not would be made clear in this meeting, along with the initial amounts of loan.
After their previous visit, Minister of Finance B.Choijilsuren said “The Stand-By program can be launched before the Lunar New Year”. Also, the Minister of Foreign Affairs noted in his interview for Bloomberg Mongolia “The Government is planning to settle the negotiation for the Stand-by program with IMF by February”.
The reason behind the rushed talks before the Tsagaan Sar or the Lunar New Year, which will be observed late February is the expected payment of USD 580 million of Development Bank bonds due in March. Although the exact amount is unclear, the first deputy governor of the central bank, O.Erdembileg said during the discussion on the state guidelines on monetary policy for 2017 held in October 2016, “Around USD 400 million loan will be available with the Stand-By program. The Government is negotiating for other sources for investment”.
Even if the government successfully negotiates with IMF on Stand-By program, there’s probably still a need of other investment sources to repay its debts. The Finance Minister said that the initial plan to pay the USD 580 million notes is yet to be released.