Please click Display Images or Download Pictures to properly view this newswire
- BREAKING NEWS -
Sunday, February 19, 2017
Mogi: apologies beforehand for not fully reflecting what was agreed. Some of the things may be incorrect and/or incomplete.. Took these notes as I heard them live
Mongolia agrees to $5.5 billion IMF extended fund facility
February 19 (Cover Mongolia) Finance Minister B. Choijilsuren, Bank of Mongolia Governor N. Bayartsaikhan and IMF head of team Koshy Mathai just finished holding a press conference announcing a "staff level" agreement on 3-year Extended Fund Facility.
IMF is giving $440 million, other donors, such as ADB and World Bank, is giving $3 billion. People's Bank of China has agreed in principle to a 3 year extension on $2 billion RMB-MNT swap. In total around $5.5 billion in financial assistance.
3 prerequisite measures needed before final approval:
1. Budget amendment
a. Reducing child money from 60% to 40% of children and converting from cash to food stamps. Government will cancel the delayed payment to other groups
b. Increasing excise tax on fuel, tobacco
2. Beginning of a diagnosis of the banking sector
3. Ending quasi-budget activities at the central bank
Formal approval by IMF board of directors expected within March.
Some of the policy contents:
- Loose fiscal policy was a key factor. Reducing budget deficit will be key.
- Social welfare is protected.
- Development Bank reform
- Bank of Mongolia will now focus solely on monetary policy and not fiscal.
o Such as transferring the subsidized mortgage program to the government from 2018.
o World Bank is advising on how to further continue the program.
o ₮4 out of ₮8 trillion "fiscal" spending from BoM was used to finance mortgages. Repayments from this will now be given to the state budget. 2017 budget amendment will reflect this.
- Extending the retirement ages in steps
The press conference was held live. IMF part was in English.
Mogi: more full coverage within the day
Suite 303, Level 3, Elite Complex
14 Chinggis Avenue, Sukhbaatar District 1
Ulaanbaatar 14251, Mongolia
Phone (Office): +976 7711 6779
P Please consider the environment before printing this e-mail.