Ulaanbaatar /MONTSAME/. Prime Minister of Mongolia L.Oyun-Erdene today presented a Bill submitted by the Government to the State Great Khural to prevent the rise in price and shortage of key commodities caused by the international crisis and reduce their impact.

In his previous press release, Prime Minister L.Oyun-Erdene announced that Mongolia was downgrading the heightened state of readiness to ‘Yellow’, declaring that the country was open to foreign tourists and reviving its economy step by step. Unfortunately, 10 days later, on February 24, tensions arose between Russia and Ukraine. In short, the Prime Minister noted in his statement that the international peace and order established by international treaties have been violated on this scale since the WWII.

In the case of Mongolia, it abstained from voting at the UN Security Council. The Prime Minister noted that the members of the National Security Council expressed the view that international tensions should be resolved in a spirit of solidarity, underlining that the Ministry of Foreign Affairs is actively cooperating with international cooperation organizations in this regard.

He noted that despite the sign of revival in the economy, which had been slowing down due to the pandemic, international tensions had brought uncertainty, with the World Bank and financial institutions estimating that international fuel prices would rise by 64-70 percent.

In the last 10 days, the price of wheat, which accounts for 41-50 percent of the world's consumption, has risen by 45-50 percent. The UN estimates that 8 to 13 million people could starve if global food shortages worsen.

"Although the pandemic situation in our country has subsided, there are still big waves posing threat in our two neighbors and the region. It is too early to predict how this situation will continue. Which is why, it is necessary to intensify the coverage of the fourth dose of the COVID-19 vaccines".

He further continued that Mongolia's air border and road transport are fully dependent on the two neighbors, and the balance of exports and imports is facing a major challenge, while stressing a need to take immediate action.

The Prime Minister emphasized that the Government had submitted to the State Great Khural a Bill on preventing the rise in the price and shortages of key commodities caused by the international crisis and reducing their impact in accordance with the Constitution and other relevant laws.

According to the Prime Minister, the law provides for the following:

-Creation of a legal environment for the government to regulate the rise in prices of meat, flour and oil products and other key commodities that affect inflation;

-Issuance of the working capital, advance payments, and other necessary financings to the relevant companies to ensure a stable supply of meat, flour and oil products;

-A number of issues related to the regulation of exchange rate.

The government's involvement in monetary policy is prohibited by law, but in the current situation, the government has to provide the necessary support to the Bank of Mongolia to increase foreign exchange reserves

It was noted that economic sanctions due to tensions between Russia and Ukraine could lead to currency shortages.

"Our country has USD 3.2 billion in foreign exchange reserves. Exchange rates began to show rapid fluctuations in a short period of time. Therefore, there is a need to limit some foreign exchange payments, control the export of Mongolian currency, involve law enforcement agencies, and strengthen the borders. The government plans to take measures to increase foreign exchange reserves. The second important provision of this law is to create a legal environment for the state to assume responsibility, along with the Central Bank, for monetary and fiscal policy over a certain period of time”.

The bill states that the following measures will be taken to increase foreign exchange reserves:

-Provision of working capital financing and advance payments to gold mining companies from the Central Bank,

-A package of measures for the purchase of gold in the external and internal markets with a 5 percent premium to the price on the London Metal Exchange.

Noting that more than 70 percent of the current situation does not depend on us, he said, "The government is able to adequately regulate the situation inside the country, but not the situation abroad”.

At the end of his statement, he called on Members of the State Great Khural, political party leaders, civil society organizations, and the media to work together with the Government in overcoming the critical situation related to the country’s national security and independence.