US State Secretary Rex W.Tillerson congratules Mongolia on behalf of President Trump on Lunar New Year Occcasion

On behalf of President Trump and the American people, we send our best wishes to the people of Mongolia as you gather with your families and friends to celebrate Tsagaan Sar on February 27.

I hope that the new year brings you prosperity and success, and that the close ties between the American and Mongolian peoples continue to deepen as we mark the 30th anniversary of diplomatic relations between our countries.

Source: US State Department

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Mongolia sets minimum yield for new dollar bonds

By Daniel Stanton and Spencer Anderson

SINGAPORE/HONG KONG, Feb 24 (IFR) - The Government of Mongolia's new US dollar bonds, to be issued as part of an exchange offer for Development Bank of Mongolia's state-guaranteed March 2017 bonds, will have a seven-year tenor and minimum yield of 8.75 percent.

The exchange offer ends on March 1 and the new notes will be priced on March 2. Investor meetings run until February 28.

Credit Suisse and JP Morgan are managing the transaction.

There had been concerns that Mongolia might struggle to meet the $580 million DBM bond redemption on March 21.

However, over the weekend the International Monetary Fund said it had reached an agreement on funding for Mongolia. The agreement is subject to the confirmation of financing assurances and approval by the IMF executive board. That means funding would not be received before the DBM bonds mature, raising the need for the exchange offer. (Reporting by Daniel Stanton and Spencer Anderson; Editing by Vincent Baby)

Source:Reuters

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Mongolia reaffirms commitment to one-China policy

China supports the aid by international financial institutions to Mongolia, and it will also consider Mongolia's hope to expand exports of mineral, agriculture and husbandry products to China, Wang said

beijing, Feb 21 Debt-ridden mongolia has reaffirmed its commitment to the One-China policy and sought support from Beijing after bilateral ties were disrupted following the visit of Tibetan spiritual leader Dalai Lama to the landlocked country last year.

China yesterday assured to help Mongolia in its financial problems after Mongolian Foreign Minister Tsend Munkh-Orgil met his Chinese counterpart, Wang Yi here.

Tibet is an inseparable part of China and Tibet-related issues are China's internal affairs, Tsend Munkh-Orgil said after meeting Wang Yi.

This was Tsend's first visit to Beijing after bilateral relations were disrupted by the Dalai Lama's visit to the landlocked country in November.

China retaliated by various measures including cancellation of meetings to provide financial assistance to Mongolia to alleviate its debt burden.

Since then Mongolia made efforts to repair ties with China and promised it would never allow future visits by the Dalai Lama, state-run Xinhua news agency reported.

Hailing the Mongolian foreign minister's statement, Wang said it was important for the two countries to boost ties from a new beginning.

The two countries should outline high-level communication, synergise China's Belt and Road Initiative with Mongolia's Prairie Road program and promote cooperation in various fields, Wang said.

Munkh-Orgil said the Belt and Road Initiative would bring great opportunities for Mongolia's development, adding that Mongolian Prime Minister Jargaltulga Erdenebat will visit China and attend the Belt and Road forum for international cooperation in May.

He also thanked China for its support during Mongolia's financial difficulties. Mongolia had also approached India for assistance.

China's assistance included providing favourable loan terms to Mongolia and extending a bilateral currency swap deal that is vital to Mongolia's foreign trade and currency stability, state-run China Daily said.

The International Monetary Fund said on Sunday that Mongolia has agreed to implement an economic rescue package proposed by the IMF and refinance bond loans, easing concerns that Mongolia might default on a loan in March.

China supports the aid by international financial institutions to Mongolia, and it will also consider Mongolia's hope to expand exports of mineral, agriculture and husbandry products to China, Wang said.

Since Mongolia is trying to avoid missing a USD 580 million sovereign-guaranteed debt repayment due in March, the IMF said in its statement on Sunday that the Asian Development Bank, World Bank and bilateral partners, including Japan and South Korea, will provide up to USD three billion in aid, the daily said.

People's Bank of China, the central Bank of China, will extend a currency swap line to Mongolia worth 15 billion yuan (USD 2.18 billion), it said.

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Mongolia should enhance ties with China to push forward its economic reforms

By Hu Weijia

Forecasts by some observers that emergency aid from the IMF is likely to help Mongolia pull through its economic crisis might appear to be overly optimistic. The country's current crisis is the combined result of both external factors and an unbalanced economic structure, which is an incentive for Mongolia to speed up its domestic reforms. China will most likely be willing to provide more assistance to help the neighboring country push its economic reform forward, but it remains uncertain whether Mongolia will accept.

The IMF package may be accompanied by additional support from China as the country's central bank is expected to extend a currency swap line to Mongolia worth 15 billion yuan ($2.18 billion), easing concerns that Mongolia might default on sovereign-guaranteed debt in March. The IMF package would buy time for the debt-ridden nation to take a breath, but an international bailout cannot solve the fundamental problems that have caused Mongolia's current economic crisis.

The nation is expected to slash its budget deficit and adopt a set of fiscal reforms after receiving the IMF package, but such efforts might not be enough to restore debt sustainability. Mongolia's heavy dependence on the export of mineral resources makes the nation sensitive to commodity price fluctuations and at risk economically. In light of these problems, Mongolia has to carry out reforms to optimize its industrial structure, of which a key step will be improving economic efficiency.

China is willing to share its experience on how to promote economic diversification and investment efficiency it has had in resource-rich areas such as North China's Inner Mongolia Autonomous Region. Hopefully Mongolia will follow China's advice. It may even be worth considering setting up a mechanism to invite Mongolian grassroots officials to visit China in a bid to learn from the country.

Mongolia would benefit if its economy were more closely tied to China's rise. Lying between China and Russia, Mongolia has strived to remain politically and economically independent. It is understandable that Mongolia may have some concerns of getting too close to China, but the overall development of Sino-Russian relations creates a sound atmosphere for enhancing China-Mongolia cooperation and the crisis-hit nation should seize this opportunity.

China's aid to Mongolia is unlikely to be limited to emergency financial assistance but would include deep economic cooperation based on mutual political trust. Mongolia needs to show its sincerity for enhancing bilateral ties and pushing forward reforms.

Source:Global Times

http://www.globaltimes.cn/content/1034207.shtml

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Former lawmaker and minister from Democratic party arrested by Anti-corruption agency

Former lawmaker and minister from Democratic Party arrested by Anti-corruption body during investigation of misappropriation of funds at Development bank of Mongolia.

B.Garamgaibaatar, former lawmaker and owner of Monroad, road construction company and N.Batbayar, former lawmaker and minister of Economic development under previous gov't are arrested by agents of Independent agency against Corruption on Monday evening around 7 pm. 

They were under investigation in relation to misappropriation of funds at the Development bank. Monroad company is one of larger borrowers of the Bank. 

Garamgaibaatar was questioned from 3 pm until his arrest at the agency and then detained at Detention unit no.461.

N.Batbayar was arrested around 8 pm and detained under arrest warranty of State prosecutor. 

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Interview with Anaraa Nyamdorj, Pioneer human rights and LGBT activist in Mongolia

Gay marriage has been firmly in the spotlight recently, but in many parts of the world the LGBT community is still persecuted. In Mongolia, there is a brave transgender activist who is standing up for his community’s rights.

Friday, the 22nd of May 2015 was a momentous day in the history of my country. With the eyes of the world watching, Ireland became the first nation on earth to legalise same-sex marriage by popular vote. A small island that had for centuries been held within the moralistic shackles of the Catholic Church and where homosexuality was a crime up until 1992, almost 70% of the Irish population made the decision to embrace fairness and equality by voting “yes”. Labelled in the run-up to the referendum as “the civil rights issue of a generation”, the overwhelming result was viewed by many as a powerful statement of acceptance towards a section of the population that had been oppressed for so long.

For more, go to:

Interview with Anaraa

Source:http://www.postpravdamagazine.com/yes-we-khaan/

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China to expand economic aid to Mongolia

Beijing will expand economic aid as ties 'ready for another start'

China extended its support to Mongolia on Monday for overcoming economic difficulties, as Foreign Minister Wang Yi announced a number of measures to help the debt-ridden neighbor.

Observers said that since the bilateral ties are emerging from a time of political frustration, Beijing's latest help is a sincere move to assist the landlocked neighbor to diversify its economy.

The measures include providing assistance and favorable loan terms to Mongolia and extending a bilateral currency swap deal that is vital to Mongolia's foreign trade and currency stability, according to a joint news conference after Wang's talks with his visiting Mongolian counterpart Tsend Munkh-Orgil on Monday.

The International Monetary Fund said on Sunday that the country has agreed to implement an economic rescue package proposed by the IMF and refinance bond loans, easing concerns that Mongolia might default on a loan in March.

China supports the aid by international financial institutions to Mongolia, and it will also consider Mongolia's hope to expand exports of mineral, agriculture and husbandry products to China, Wang said.

Since Mongolia is trying to avoid missing a $580 million sovereign-guaranteed debt repayment due in March, the IMF said in its statement on Sunday that the Asian Development Bank, World Bank and bilateral partners, including Japan and South Korea, will provide up to $3 billion in aid.

People's Bank of China, the central Bank of China, will extend a currency swap line to Mongolia worth 15 billion yuan ($2.18 billion), while the IMF said it will offer three-year loans worth about $440 million, Agence France-Presse reported.

Mongolia angered China in November by allowing a visit by the 14th Dalai Lama, who has pushed for separating Tibet from China.

In January, during a phone call between Wang and his Mongolian counterpart, Mongolia said it had reflected deeply on the visit and promised to not allow the Dalai Lama to visit again.

On Monday, Wang said the bilateral relationship "is ready for another start".

Munkh-Orgil, the Mongolian foreign minister, said his country remains true to the one-China policy and Tibet is part of China. Additionally, Mongolia appreciates China's help in addressing economic problems, he said.

He added that Mongolia's prime minister expects to visit China in May to attend the Belt and Road Forum for International Cooperation.

Xing Guangcheng, a senior researcher on Russian and Central Asian studies at the Chinese Academy of Social Sciences, said the helping hand was offered at a time when Mongolia has fixed the trouble brought by allowing the Dalai Lama's entry, which "pushed on China's bottom line".

Zhang Jingquan, a professor on Northeast Asian studies at Jilin University in Changchun, said the measures announced by Wang on Monday "are meeting the desperate need" of Mongolia.

The country could take the improvement in bilateral ties as an opportunity to diversify its conomy and change its inefficient development pattern, Zhang noted.

Source:http://www.ecns.cn/2017/02-21/246131.shtml

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Debt-plagued Mongolia accepts IMF condition to refinance existing loan

Mongolia has agreed to implement an economic rescue package proposed by the International Monetary Fund (IMF) and refinance bond loans, easing the nerves of international investors and the business community fearing Mongolia might go default on its loan in March.

"The Mongolian government agreed to issue another commercial bond to replace the current 580-million-U.S. dollar bond due to be matured in March 21, 2017 at the suggestion of IMF," Mongolian Finance Minister Choijilsuren Battogtokh said on Sunday.

Koshy Mathai, the IMF mission chief for Mongolia, said the two sides reached an agreement on the program under the Extended Fund Facility.

It covers a period of three years, with 440 million dollars in financing from the IMF, and about 3 billion dollars from bilateral and multilateral partners, he said.

He added that this was a staff agreement only and was subject to confirmation of financing from the partners to the program and a few "prior actions."

The negotiation with the IMF lasted six months and was concluded at 1:30 a.m. local time on Sunday (1730 GMT Saturday), the Mongolian finance minister said, calling it a tough negotiation.

The minister listed three main conditions Mongolia has agreed upon.

"The 2017 budget has to be revised before the IMF executive board approval of the program. Secondly, the Mongol Bank must stop financing the mortgage scheme and transfer responsibility for the scheme to the government. Thirdly the Mongol Bank must stop any funding activities that fall outside the budget," he said.

The program is expected to be implemented in several stages when Mongolia revises its taxation laws and reduces social welfare spending which are conditions of the IMF program.

The looming 580-million-dollar bond was issued five years ago by the Development Bank of Mongolia with government guarantee. Most of the loans went to show-case projects such as construction of public roads and heavy industrial plants with no prospect of immediate returns.

Mongolia's total debt stands at 21.6 billion U.S. dollars including government loans, government guarantees and private company loans.

Mongolia's largest international bond, known as the Genghis Bond raised in late 2012, is due to be repaid in installments in 2018 and 2022. Endi

Source:Xinhua news agency

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IMF Reaches Staff-Level Agreement with Mongolia on Three-Year Extended Fund Facility

February 19, 2017

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.

A staff team of the International Monetary Fund (IMF) led by Koshy Mathai visited Ulaanbaatar during February 1-19 to continue discussions with the Mongolian authorities on a set of economic policies that could be supported by IMF financial assistance. At the end of the visit, Mr. Mathai made the following statement:

“The Mongolian government and the IMF team have reached staff-level agreement on an economic and financial program to be supported by a three-year Extended Fund Facility (EFF) for SDR 314.505 million (435 percent of quota), or about $440 million. Other international partners also plan to support the government’s program: the Asian Development Bank (ADB), World Bank, and bilateral partners including Japan and Korea are together expected to provide up to $3 billion in budget and project support; and the People’s Bank of China is expected to extend its RMB 15 billion swap line with the Bank of Mongolia for at least another three years.

“The total external financing package will thus be around $5.5 billion and will support the authorities’ “Economic Stabilization Program,” which intends to restore economic stability and debt sustainability as well as to create the conditions for strong, sustainable, and inclusive growth, while protecting the most vulnerable citizens.

“This agreement is subject to the confirmation of financing assurances, the completion of prior actions by the authorities, and the approval of the IMF Executive Board. The Board is expected to consider Mongolia’s request in March.

“Mongolia is well endowed with mineral resources, strong potential in agriculture and tourism, and a young and dynamic population. Its long-run future is promising, but in recent years it has been hit hard by the sharp decline of commodity prices and a collapse in foreign direct investment (FDI). Attempts to stem the decline through expansionary policies proved ineffective after a few years, and the economy is now stagnating, weighed down by high debt and low foreign-exchange reserves.

“Fiscal consolidation is a key priority, as loose fiscal policy in the past was a major driver of Mongolia’s current economic difficulties and high debt. Budget deficits will be reduced steadily, while priority social spending will be maintained: for instance, the savings from better targeting the Child Money Program will be used entirely to increase spending on the food stamp program for the most vulnerable. Also, to boost revenue, the personal income tax will be made more progressive, with rates on only higher-income households increased.

“The Development Bank of Mongolia (DBM) will henceforth operate in an independent, purely commercial manner, as laid out in the recently passed DBM law, and the Bank of Mongolia (BOM) will not engage in additional quasifiscal activity, with the mortgage program now operating essentially as a revolving fund. In addition, the law on concession projects will be reformed, and the public investment program (PIP) will be rationalized and better aligned with national development priorities.

“The authorities will adopt a set of important fiscal reforms to ensure that budget discipline is maintained, building on the existing framework for fiscal responsibility. These include the creation of a Fiscal Council to provide independent budget forecasts and costings of new policy proposals, and provisions to give the government sole authority to determine the total amount of spending in the budget, as well as to require Ministry of Finance approval of any proposals to cabinet with a budgetary cost.

“Monetary policy will remain appropriately tight, given the objective of price stability. Over time, however, as the economy normalizes, it may be appropriate to cut the policy rate if external and inflation indicators permit. The exchange rate will continue to move flexibly, with intervention limited to smoothing excessive volatility and preventing disorderly market conditions. A major priority will be the adoption of a new BOM law to clarify its mandate, strengthen governance, and improve independence.

“Strengthening the banking system is a crucial part of the program, to ensure that the banks can support sustainable and inclusive economic growth. The authorities’ first priority is to undertake a comprehensive diagnosis of the banking system to assess institutions’ financial soundness and resilience. With the results of this diagnostic in hand, the BOM will engage banks to ensure appropriate restructuring and recapitalization, as necessary. The BOM will complement these actions by strengthening the regulatory and supervisory framework, and government is committed to improving the deposit insurance system. The authorities are also committed to strengthening the regime for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).

“The authorities intend directly to boost economic activity and prospects by attracting new investment to major mines, and by implementing an array of structural reforms to promote economic diversification and improve competitiveness, especially in agriculture and tourism. The broad range of reforms envisaged under the program have been developed in close collaboration with the World Bank and ADB.

“The authorities’ adjustment and structural reform program, supported by the large package of external financing, is expected to stabilize the economy and lay the basis for sustainable, inclusive, long-run growth. By 2019, growth is projected to pick up to around 8 percent, as economic and financial conditions improve and key mining projects take off. Foreign exchange reserves should rise to a healthy $3.8 billion (above 6 months of imports) by the end of the program, similar to levels seen in 2012, before Mongolia was hit by external shocks. Fiscal consolidation will leave room for the banking sector, over time, to extend more credit to the private sector, consistent with projected growth. These policies would also put public debt on a declining path over the course of the program.

“The government’s recently announced plan to engage with its private external creditors to secure financing assurances for the program should help restore debt sustainability. Specifically, the financing parameters of the program assume that external private creditor exposure will be maintained at its current level over the program period, on terms consistent with debt sustainability, and gross financing needs will remain at prudent levels during the post-program period.

“On behalf of the staff team, I would like to thank the authorities for their warm welcome, and the constructive discussions and excellent collaboration we have had over recent months, bringing us to today’s successful conclusion.”

Source:IMF

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Mongolia reaches $5.5bn IMF deal as debt repayments loom

Final approval conditional on parliament approving fiscal discipline measures

Mongolia has reached a $5.5bn bailout agreement with the International Monetary Fund just weeks before the country’s development bank faced repayments on a $580m bond.

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The IMF will provide Mongolia with funds totalling $440m, with the World Bank, Asian Development Bank, Japan and South Korea offering $3bn in preferential loans. The mining-dependent country has been buffeted by the steep slump in coal, copper and other commodity prices over the past five years. It is now anticipating a recovery in the commodities cycle and new investment in giant mines in the Gobi desert. Mongolia is in separate negotiations with the Chinese government over a three-year extension of a Rmb15bn ($2.2bn) central bank swap agreement, which has been its largest single source of foreign financing. N. Bayartsaikhan, governor of the Bank of Mongolia, told reporters that China has “agreed in principal” to extend the swap. Mongolia has sought support from the US, Japan and Europe as part of its “third neighbour” policy to avoid domination by China and Russia.

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“[Mongolia’s] long-run future is promising,” the IMF said in a statement. “But in recent years it has been hit hard by the sharp decline of commodity prices and a collapse in foreign direct investment.” The fund projected that economic growth will recover to 8 per cent by 2019 as foreign exchange reserves reach $3.5bn — a level not seen since 2012. The Bank of Mongolia shocked international markets in August by raising interest rates 450 basis points to 15 per cent. Mongolia’s currency, the tugrik, has fallen almost 30 per cent against the dollar since June. Final approval of the IMF-led package is conditional on Mongolia’s parliament approving fiscal discipline measures, including the repeal of a politically popular cash subsidy for all families with children. “Fiscal consolidation is a key priority as loose fiscal policy was a major driver of Mongolia’s current economic difficulties and high debt,” the IMF said. It added that budget deficits would be “reduced steadily”, but not at the expense of “priority” social spending. The “staff-level agreement” is also subject to final approval by the IMF’s executive board. The IMF agreement comes a month before a $580m payment is due on a bond issued by the Development Bank of Mongolia. It is the first of several payments over the next year that together amount to about $2bn, or about one-sixth of the country’s gross domestic product. On Sunday, the government said it planned to launch an exchange offer this week for the DBM bonds, swapping them for government debt. No maturity for the new bonds was given. Extending the swap agreement with China — which Mongolia has mostly drawn down at interest rates of about 6 per cent — will allow Mongolia to defer a hefty repayment. According to people familiar with the bailout negotiations, the ADB intends to lend Mongolia about $300m per year over the next three years in budgetary support. That will replace previous loans of a roughly equivalent amount that primarily went towards infrastructure construction and poverty alleviation programmes.

Source:Financial Times

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IMF agrees terms for $5 billion loan to debt-ridden Mongolia

The Mongolian government and envoys from the International Monetary Fund said Sunday that they and other partners have agreed on terms for a more than $5 billion loan package to the north Asian country to help get its economy back on track.

The deal is subject to approval by the IMF's executive board, which is expected to consider Mongolia's request in March.

Under the preliminary agreement, the IMF would provide $440 million over three years. The Asian Development Bank, World Bank, Japan and South Korea are together expected to provide up to $3 billion, and the People's Bank of China is expected to extend its 15 billion RMB ($2 billion) swap line with the Bank of Mongolia for at least another three years, the IMF said in a statement.

Finance Minister Choijilsuren Battogtokh said that the six-month negotiations had been tough, and that the government would be revising its 2017 budget before the IMF executive board considers whether to approve the loan.

He said the government proposed to bring in more money for the budget by increasing income, fuel and other taxes, and by raising the retirement age from 55 to 65 for women, and from 60 to 66 for men. Its proposals have to be approved by parliament during a session in March, which is likely because the ruling Mongolian People's Party has a clear majority.

Battogtokh said that with the loan package, the government estimated growth would be "below zero percent" in 2017, 1.8 percent in 2018 and 8.1 percent in 2019.

The economy of mineral-rich Mongolia has been hit hard in recent years by a sharp decline in commodity prices and a collapse in foreign direct investment.

Mongolia's national debt now stands at about $23 billion, or twice the annual economic output, and a $580 million payment to foreign bondholders is due March 21. Battogtokh said that the government, at the IMF's suggestion, will refinance the $580 million bond with another similar commercial bond.

"We will offer the new bonds at a market-friendly rate," the finance ministry said on its website.

The IMF statement said the loan agreement would mean Mongolia has to strengthen its banking system and adopt fiscal reforms to ensure that budget discipline is maintained.

Generally, terms required by the IMF as a condition for such lending prompt complaints in borrower countries that the conditions hurt the poor or undercut economic growth by reducing social spending or investment in public facilities.

Adding to Mongolia's woes is an exceptionally cold winter for the second straight year, which the Red Cross warned last week was putting the livelihoods of more than 150,000 nomadic herders and family members at risk.

Dale Choi, an analyst with the Mongolia Metals and Mining research firm, said the agreement announced Sunday means investors can now make assumptions and investment decisions.

"It brings clarity, which investors have been waiting for," he said.

Source:AP news agency

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Factsheet on the EU-Mongolia Framework Agreement on Partnership and Cooperation

The Framework Agreement on Partnership and Cooperationbetween the European Union and Mongolia is testimony to the growing importance of EU-Mongolia relations, which are based on the shared values of democracy, rule of law and human rights and respect for international commitments in this regard. It will provide the basis for a broader and more effective engagement by the EU and its Member States with Mongolia moving forward.

The Framework Agreement consists of 65 Articles with a Preamble and nine Titles, which cover:

1.    the nature and scope of the Agreement;

2.    bilateral, regional and international cooperation;

3.    cooperation on sustainable development;

4.    cooperation on trade and investment issues;

5.    cooperation in the area of justice, freedom and security;

6.    cooperation in other sectors;

7.    means of cooperation;

8.    the institutional framework;

9.    final provisions

The Agreement provides a general framework for promoting bilateral, regional and international cooperation and includes the EU’s standard political clauses on human rights, weapons of mass destruction (WMDs), the International Criminal Court (ICC), small arms and light weapons (SALWs) and counter-terrorism.

The Agreement will strengthen political, economic and sectoral cooperation across a wide range of policy fields, including trade and investment, sustainable development, justice, freedom and security. It encompasses areas such as cooperation on principles, norms and standards, raw materials, migration, organised crime and corruption, industrial policy and small and medium-sized enterprises cooperation, tourism, energy, education and culture, environment, climate change and natural resources, agriculture, health, civil society, and the modernisation of the state and public administration.

The negotiations for the EU-Mongolia Framework Agreement on started in 2010 and were concluded in 2013. On 15 February 2017, the European Parliament gave its consent to conclude the. This vote by the European Parliament was an important step in concluding the Agreement and paves the way for its entry into force.

Once it enters into force, The Agreement will supersede the current legal framework of the 1993 Agreement on Trade and Economic Cooperation between the European Economic Community and Mongolia.

Find the full text of the Framework Agreement on Partnership and Cooperation

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Mongolia Foreign Minister: We Prioritize Ties with Russia and China

ULAANBAATAR – Mongolia can now be considered “locked in” between two great powers as Minister of Foreign Affairs Tsendiyn Munkh-Orgil acknowledged in an interview with EFE, adding that ties with Russia and China are still priorities, though relations with the US and EU will also continue.

Munkh-Orgil, a lawyer trained in Moscow and at Harvard, has been leading Mongolian diplomacy since July 2016 from his office at the ministry’s headquarters, one of the many Soviet-styled buildings still preserved in the capital.

Mongolia, whose economy has mainly been supported over the past decade by mining, reached 17 percent growth annually. However, like other countries dependent on raw materials, the industry has been in crisis due to low international prices.

“It is an open secret that we are facing a very difficult economic and fiscal situation” admitted the minister, who did not only blame the falling commodity prices for the situation but also “a lack of consistent strategic economic management and lack of structural reforms that should have been done quite some time ago.”

Munkh-Orgil has been in office since the victory in last year’s elections of the ex-communist and now social-democrat Mongolian People’s Party, which had been in the opposition for the past four years.

“This government inherited serious budget deficits, ballooning foreign debts” and an unsustainable economy, he said, adding that the government of Prime Minister Jargaltulgyn Erdenebat is trying to steer the course with spending cuts and negotiation of international financial assistance.

“I am optimistic that in the next few days, Mongolia and international financial institutions (including the International Monetary Fund) will be able to come up with a positive announcement” of these negotiations, he said.

Munkh-Orgil proudly recalled that “it is not that Mongolia was subjugated or was dependent on the superpowers, there was quite an extended period of time in history that we were the dominant party,” a reference to the time of Genghis Khan, the founder of the second largest empire in history.

Although Mongolia has, since the fall of its communist regime in 1990, celebrated its independence after living 50 years in the Soviet Union’s orbit, Munkh-Orgil recognized that “there is a clear-cut priority in our foreign policy to develop friendly relations with China and Russia.”

It does not have to be exclusive, emphasized the minister, adding that the ties with the United States, the European Union, Japan and Turkey are also very important for Mongolia in a globalized world.

“Absolutely excellent relations with the European Union. This month, in fact, the European Parliament is expected to ratify the partnership agreement with Mongolia,” said the minister.

With the US, “We have a clear commitment from the new administration (of President Donald Trump) that it will continue with its projects and cooperation with Mongolia,” which, he recalled, are not only in the political and economic fields but also in the military, exemplified by the group of Mongolian soldiers operating in Afghanistan.

Chinese-Mongolian relations became strained in November, when the Dalai Lama visited Mongolia – where Tibetan Buddhism is the dominant religion – sparking protests and pressures from Beijing.

“On the other hand, notwithstanding the religious nature of his trip, it put significant strains on Chinese-Mongolian relations,” said the minister, confirming that as a result of the diplomatic conflict, Beijing suspended some bilateral contacts and negotiations.

The Minister and his Chinese counterpart, Wang Yi, eventually agreed through a telephone call that “for the time that this government stays in power, the Dalai Lama will not be visiting Mongolia,” which reopens the door for trade and economic negotiations between the two countries, an issue which Munkh-Orgil plans to discuss next week in Beijing.

Source:Latin American Herald Tribune

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Mongolian FM to visit China

Mongolian Foreign Minister Tsend Munkh-Orgil is to pay an official visit to China from Feb. 19 to 21, at the invitation of his Chinese counterpart.

Foreign Ministry spokesman Geng Shuang said Friday that Munkh-Orgil would hold talks with his Chinese counterpart Wang Yi on cementing mutual trust, deepening cooperation and expanding people-to-people exchanges.

Geng said that Munkh-Orgil would also meet with Chinese leaders.

"China hopes the two countries can consolidate the political foundation of bilateral ties, push forward exchanges and cooperation, so as to promote the development of the China-Mongolia relationship," Geng said.

Source:Xinhua news agency

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Mongolian antelopes heading towards extinction

2,500 Mongolian saiga antelopes have died since December 2016 due to a livestock virus

Wildlife species usually go extinct due to various reasons like climate change, global warming and development related to a better life for humans but, in the case of the Mongolian #Saiga Antelope, the reason is a disease that has come from other animals.

For more,

go to:

Mongolian antelopes heading towards extinction

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Mongolia votes to nationalise former Russian copper mine stake

(Corrects to remove quotation marks in paragraph 12)

By Terrence Edwards

Feb 16 Mongolia plans to nationalise a 49 percent stake in a copper mine sold to a domestic private firm last year, bringing one of Asia's biggest copper producers under full control in a move its former Russian owner said could deter foreign investors.

The country's parliament voted to nationalise the Erdenet mine last week after a probe by lawmakers concluded the June 2016, $400 million sale by state-owned Russian holding company Rostec to little-known Mongolian Copper Corp (MCC) was unconstitutional as it was agreed without lawmakers' approval.

For more, go to:

Reuters story on Erdenet

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Moody's reviews seven Mongolian banks for downgrade following sovereign review

Global Credit Research - 16 Feb 2017

Hong Kong, February 16, 2017 -- Moody's Investors Service has placed on review for downgrade the long-term ratings of seven Mongolian banks following Moody's review for downgrade of Mongolia's sovereign ratings on 15 February 2017.

The seven banks are: Bogd Bank LLC; Capital Bank LLC; Golomt Bank LLC; Khan Bank LLC; State Bank LLC; Trade and Development Bank of Mongolia LLC; and XacBank LLC.

Please see the related press release for more information on the sovereign review at this link:

https://www.moodys.com/research/--PR_362057

Moody's expects to complete the review within three months.

A full list of the affected ratings can be found at the bottom of this press release.

RATINGS RATIONALE

The action on the seven banks' ratings reflects the high correlation between the creditworthiness of the Mongolian banking system and that of the sovereign, given (1) the strong extent to which the banks' businesses depend on macroeconomic and financial conditions in Mongolia, and in view of the low level of cross-border diversification in their operations; and (2) their significant direct and indirect exposures to domestic sovereign debt relative to their capital bases.

The sovereign review is initiated because of uncertainty around the financing options for Development Bank of Mongolia's (DBM) $580 million repayment which is maturing on 21 March 2017. DBM lacks the foreign currency funds to finance the repayment itself, and the presence of an irrevocable and unconditional government guarantee on the DBM issuance means that Moody's would consider a default on the notes to constitute a default by the sovereign. The DBM notes also contain cross-acceleration clauses on other government obligations, implying wider implications of a default for investors.

The purpose of the sovereign review is to assess the implications of the 21 March 2017 maturity of the government-guaranteed notes issued by the DBM for the government's fiscal position and foreign exchange buffers. In Moody's view, the as yet unresolved issue of how that maturity will be financed poses a near-term threat to Mongolia's credit profile, notwithstanding ongoing discussions with the IMF.

Should an agreement with the IMF be reached during the review, the review will also assess the extent to which the terms of the resultant program mitigate those near-term risks, as well as offer the prospect of improvements in Mongolia's credit profile over the medium term.

In particular, the review for Trade and Development Bank of Mongolia LLC (TDBM) will focus on the implications -- if any -- for holders of the TDBM government-guaranteed bond of $500 million due on 19 May 2020, in the event that the upcoming repayment in March for a similarly guaranteed government bond issued by DBM results in economic losses for bond holders, and the government guarantee is not honored.

What Could Stabilize the Rating at the Current Level: Bogd Bank LLC; Capital Bank LLC; Golomt Bank LLC; Khan Bank LLC; State Bank LLC; and XacBank LLC.

Because these banks' caa1 BCAs are at the same level as Mongolia's sovereign rating, an upgrade is unlikely in the near term.

At the end of the review period, Moody's will confirm their Caa1 ratings with stable outlooks if the sovereign rating of Caa1 is confirmed with a stable outlook; and if the banks' asset quality and profitability profiles, which are under pressure from the challenging operating environment, show signs of clear stabilization.

What Could Change the Rating - Down: Bogd Bank LLC; Capital Bank LLC; Golomt Bank LLC; Khan Bank LLC; State Bank LLC; and XacBank LLC

Factors that could result in a downgrade include:

1) A downgrade of Mongolia's sovereign rating; or

2) A downgrade of the banks' BCAs

The banks' BCAs could be downgraded if: (1) asset quality deteriorates significantly, for example, with problem loans/gross loans exceeding 9.0% for a sustained period; (2) tangible common equity falls below 8%; or (3) profitability deteriorates significantly, leading to annual net losses on a sustained basis.

What Could Stabilize the Rating at the Current Level: Trade and Development Bank of Mongolia LLC.

Because the bank's caa1 BCA is at the same level as Mongolia's sovereign rating, an upgrade is unlikely in the near term.

At the end of the review period, Moody's will maintain its Caa1 rating with a stable outlook if the upcoming repayment in March for a similarly guaranteed government bond issued by DBM does not increase the risk of economic loss for the government-guaranteed bond holders of TDBM, and if there is no reduction in the likelihood that the government guarantee will be exercised if necessary; and if the banks' asset quality and profitability profiles, which are under pressure from the challenging operating environment, show signs of clear stabilization.

What Could Change the Rating - Down: Trade and Development Bank of Mongolia LLC

1) A high likelihood of losses for holders of TDBM government guaranteed bonds if the upcoming repayment in March for a similarly guaranteed government bond issued by DBM increases the risk of economic losses for bond holders of TDBM and reduces the likelihood that the government guarantee will be exercised;

2) A downgrade of Mongolia's sovereign rating; or

3) A downgrade of the bank's BCA

The bank's BCA could be downgraded if: (1) asset quality deteriorates significantly, for example, with problem loans/gross loans exceeding 9.0% for a sustained period; (2) tangible common equity falls below 8%; or (3) profitability deteriorates significantly, leading to annual net losses on a sustained basis.

The resultant ratings and actions are listed below:

Issuer: Bogd Bank LLC

- Baseline Credit Assessment (BCA) of caa1 placed on review for downgrade

- Adjusted BCA of caa1 placed on review for downgrade

- Long-term Counterparty Risk Assessment of B3(cr) placed on review for downgrade

- Short-term Counterparty Risk Assessment affirmed at NP(cr)

- Local Currency (LC) Deposit Rating of Caa1 placed on review for downgrade

- Foreign Currency (FC) Deposit Rating of Caa2 placed on review for downgrade

- LC/FC Short-term Deposit Rating, affirmed at NP

Issuer: Capital Bank LLC

- BCA of caa1 placed on review for downgrade

- Adjusted BCA of caa1 placed on review for downgrade

- Long-term Counterparty Risk Assessment of B3(cr) placed on review for downgrade

- Short-term Counterparty Risk Assessment affirmed at NP(cr)

- LC Deposit Rating of Caa1 placed on review for downgrade

- FC Deposit Rating of Caa2 placed on review for downgrade

- LC/FC Short-term Deposit Rating, affirmed at NP

Issuer: Golomt Bank LLC

- BCA of caa1 placed on review for downgrade

- Adjusted BCA of caa1 placed on review for downgrade

- Long-term Counterparty Risk Assessment of B3(cr) placed on review for downgrade

- Short-term Counterparty Risk Assessment affirmed at NP(cr)

- LC Deposit Rating of Caa1 placed on review for downgrade

- FC Deposit Rating of Caa2 placed on review for downgrade

Issuer: Khan Bank LLC

- BCA of caa1 placed on review for downgrade

- Adjusted BCA of caa1 placed on review for downgrade

- Long-term Counterparty Risk Assessment of B3(cr) placed on review for downgrade

- Short-term Counterparty Risk Assessment affirmed at NP(cr)

- LC Deposit Rating of Caa1 placed on review for downgrade

- FC Deposit Rating of Caa2 placed on review for downgrade

- LC/FC Issuer Rating of Caa1 placed on review for downgrade

- LC/FC Short-term Deposit Rating, affirmed at NP

Issuer: State Bank LLC

- BCA of caa1 placed on review for downgrade

- Adjusted BCA of caa1 placed on review for downgrade

- Long-term Counterparty Risk Assessment of B3(cr) placed on review for downgrade

- Short-term Counterparty Risk Assessment affirmed at NP(cr)

- LC Deposit Rating of Caa1 placed on review for downgrade

- FC Deposit Rating of Caa2 placed on review for downgrade

Issuer: Trade and Development Bank of Mongolia LLC

- BCA of caa1 placed on review for downgrade

- Adjusted BCA of caa1 placed on review for downgrade

- Long-term Counterparty Risk Assessment of B3(cr) placed on review for downgrade

- Short-term Counterparty Risk Assessment affirmed at NP(cr)

- LC Deposit Rating of Caa1 placed on review for downgrade

- FC Deposit Rating of Caa2 placed on review for downgrade

- LC/FC Short-term Deposit Rating, affirmed at NP

- LC/FC Issuer Rating of Caa1 placed on review for downgrade

- LC/FC Short-term Issuer Rating, affirmed at NP

- Backed FC Senior Unsecured of Caa1 placed on review for downgrade

- FC Senior Unsecured MTN of (P)Caa1 placed on review for downgrade

Issuer: XacBank LLC

- BCA of caa1 placed on review for downgrade

- Adjusted BCA of caa1 placed on review for downgrade

- Long-term Counterparty Risk Assessment of B3(cr) placed on review for downgrade

- Short-term Counterparty Risk Assessment affirmed at NP(cr)

- LC Deposit Rating of Caa1 placed on review for downgrade

- FC Deposit Rating of Caa2 placed on review for downgrade

- LC/FC Issuer Rating of Caa1 placed on review for downgrade

- FC senior unsecured MTN of (P)Caa1 placed on review for downgrade

- LC/FC Short-term Deposit Rating, affirmed at NP

- LC/FC Short-term Issuer Rating, affirmed at NP

- Other Short-term Program, affirmed at (P)NP

The principal methodology used in these ratings was Banks published in January 2016. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

The first name below is the lead rating analyst for this Credit Rating and the last name below is the person primarily responsible for approving this Credit Rating.

Hyun Hee Park
Asst Vice President - Analyst
Financial Institutions Group
Moody's Investors Service Hong Kong Ltd.
24/F One Pacific Place
88 Queensway
Hong Kong
China (Hong Kong S.A.R.)
JOURNALISTS: (852) 3758 -1350
SUBSCRIBERS: (852) 3551-3077

Graeme Knowd
MD - Banking
Financial Institutions Group
JOURNALISTS: 813-5408-4110
SUBSCRIBERS: 813-5408-4100

Releasing Office:
Moody's Investors Service Hong Kong Ltd.
24/F One Pacific Place
88 Queensway
Hong Kong
China (Hong Kong S.A.R.)
JOURNALISTS: (852) 3758 -1350
SUBSCRIBERS: (852) 3551-3077

Source:Moody's Investor Service

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