What is the status of Mongolian government negotiation with IMF?

We received e-mails from some readers asking latest about ongoing negotiation between Mongolian government and IMF Team started since Jan 31, 2017.

As far as we understand and reported in local news media, Minister of Finance Choijilsuren is heading Mongolian side in the negotiation.

Currently, Mongolia is negotiating the terms of aid package offered by IMF. According to IMF, Mongolia have choice: it can select either Standby Arrangement or Standby Credit Facility. 

Development bank of Mongolia set aside $ 200 million dollars towards repayment of $ 580 million dollars Euro Bond loan due in March 21. Officials of Mongolbank, central bank and PM Erdenebat repeatedly reiterated that Mongolia can and will pay the loan on time, fully, despite the fact it is short of $ 380 mill dollars to pay the loan. 

Deal between IMF and Gov't is expected to be disclosed for public by Feb 15, that's next Wednesday. Previously, Gov't asked for loan from Japan, China, South Korea, Russia, Gulf Countries and Russia refused and Gulf countries diplomatically said they will consider the request. 

Dalai Lama's visit in Nov, last year interrupted normal relationship of Mongolia and China including the loan talk. However, recently, China signaled it can help Mongolia during its times of need. Vice director of Development bank of Mongolia confirmed that loan talk with China resumed. 

Government said it received positive responses from Japan and South Korea regarding loan request. 

Our take is even if deal with IMF is not reached, Government will be able to repay the Euro Bond loan this time and no default or near default situation will emerge.
It seems, all officials at Mongolbank and government unanimously agree that the Euro bond loan default will send most negative signal to international investors about Mongolian economic potential and must be prevented at any cost. 

Given the interest of those readers, we will update about status of IMF and Government negotiation.



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