Ulaanbaatar
Interest Rates of Bonds Decreased from 11-12 percent to 8
Economy
Ulaanbaatar /MONTSAME/ At the Cabinet meeting held yesterday, Minister of
Finance B. Javkhlan informed that a new five-year USD bond was successfully
issued and traded to refinance the “Gerege” and “Khuraldai” bonds.
“Thanks to the many
months of efforts and preparations, we received orders worth USD 4 billion from
138 investors within one day. As a result, we managed to decrease the 11-12
percent interest rates of “Gerege” and “Khuraldai” bonds, which amounted to USD
650 million, to 8 percent.” continued Finance Minister B. Javkhlan.
When the interest rate of the U.S. Federal Reserve was 1 percent, the Gerege
and Khuraldai bonds were issued with interest rates of 5.7 percent and 8.75 percent,
respectively. Whereas today, the interest rate of the Federal Reserve is 4.3 percent,
and we have issued our bond with an interest rate of 8.65%.
“We have managed to
issue our bonds at adequate interest rates amid the trend of Asian capital
flowing into the U.S. market. It demonstrated the positive evaluation,
attitude, and trust of foreign investors toward our government’s performance”, he
added.
The Finance Minister
continued “As a result of the foreign debt management measures, accountability
and market capacity of the local commercial banks have improved due to the
economic expansion. Local banks hold 10-15 percent of our total foreign bonds.
For this time, local banks also made significant contributions to successful
trading by purchasing the bond with equal amounts to the bond they have already
held. Alongside the improved indicators of our government’s bonds, some
local companies’, such as MIK and Energy resources, foreign debt indicators
improved significantly within this one day of trading. Moreover, the joint
efforts of the Bank of Mongolia and the Ministry of Economy and Development
successfully resulted in the achievement of the foreign exchange reserves of
Mongolia at USD 3.4 billion.”
