IMF Executive Board Approves US$99 Million Disbursement Under the Rapid Financing Instrument to Mongolia to Address the COVID-19 Pandemic

• The COVID-19 pandemic has taken a large toll on economic activity in Mongolia, giving rise to urgent budget and balance of payments needs.
• To support Mongolia, the IMF has approved the request for emergency financial assistance under the Rapid Financing Instrument (RFI) of about US$99 million.
• This emergency financial assistance will help support foreign exchange reserves, create fiscal space for essential pandemic-related expenditure, and catalyze donor support.

WASHINGTON, DC – The Executive Board of the International Monetary Fund (IMF) approved Mongolia’s request for emergency financial assistance under the Rapid Financing Instrument (RFI) equivalent to SDR 72.3 million (about US$99 million, or 100 percent of quota) to meet urgent budgetary and balance of payment needs stemming from the outbreak of COVID-19 and to support the most affected sectors and vulnerable groups.

Following the Executive Board’s discussion of Mongolia, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Chair, made the following statement:

“Mongolia has successfully avoided a domestic outbreak of COVID-19 thus far, helped by the early introduction of social distancing and tight health protocols for cross-border flows. Nonetheless, the pandemic has sharply reduced economic activity due to both the economic cost of the containment measures and the fall in external demand. There is now an urgent balance of payments need and a fiscal financing gap.

“The authorities have already taken a number of measures to limit the economic contraction and help the most vulnerable. Recent revisions to the budget allow for higher health and social spending as well as tax relief to affected households and businesses. In addition, the Bank of Mongolia has eased monetary and financial policies to help prevent a disorderly contraction in bank lending to the private sector.

“Emergency financing under the IMF’s RFI will provide much needed support to respond to the urgent balance of payments and budgetary needs. Additional assistance from development partners will be required to support the authorities’ efforts and close the financing gap. The authorities’ commitment to high standards of transparency and governance in the management of financial assistance is welcome.

“As the immediate threat to the economy subsides, it will be critical to resume key reforms begun during the recent Extended Fund Facility arrangement. These include a return to fiscal consolidation to reduce still high public debt, a more flexible exchange rate to build up foreign exchange reserves, remedying AML-CFT deficiencies, and stronger supervisory enforcement to ensure that all banks have sufficient capital.”

IMF Communications Department

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PRESS OFFICER: KEIKO UTSUNOMIYA

PHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG

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IFC Looks to Opportunities in Mongolia

Ulaanbaatar, Mongolia

Nena Stoiljkovic, Vice President for Asia and Pacific, IFC, a member of the World Bank Group, has arrived in Mongolia for her first official visit to the country.
During her two-day visit, Stoiljkovic will meet senior government officials, representatives from financial institutions, and business leaders and visit projects supported by IFC, the largest global development organization working with the private sector in emerging markets.  

“Mongolia is a unique country, with unique opportunities and challenges,” Stoiljkovic said. “IFC has been working in Mongolia since 1997 to help support the country meet its development challenges. I am keen to hear first-hand how IFC can do more to help Mongolia further diversify its economy and spur jobs for people, particularly Mongolia’s youth.”

IFC has been operating in Mongolia since 1997 and providing finance across many sectors, including banking, healthcare, hospitality, mining and services. Our most recent investment was a $65 million loan package to XacBank to support access to finance for more than 44,000 micro, small and medium sized enterprises in Mongolia. Support of MSMEs will continue to be one of our main focus areas.

“We know too many enterprises have been struggling to gain access to the finance they need to expand their businesses and create jobs,” Stoiljkovic said. “This financing will clearly help and IFC is also keen to explore other opportunities for investments to help the country build a more competitive, sustainable and diversified economy.”

IFC and its sister organization, the World Bank, both members of the World Bank Group, have been providing policy advice and technical support to Mongolia to enhance investment policy, restore investor confidence, diversify exports, and build institutional capacities.

Over the past 22 years, IFC has invested $2.6 billion — $849 million from its own account and $1.77 billion in syndication — in 35 private-sector projects across Mongolia’s key industries.

About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities where they are needed most. In fiscal year 2019, we delivered more than $19 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.

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Mongolia must reform banks to receive IMF aid

International Monetary Fund officials said that they will go back to providing Mongolia with bailout funds so long as there are major reforms of the country’s banking system.

The authorities needed to take two major steps to start receiving aid again, said the IMF Mongolia team leader Geoff Gottlieb in a statement issued on June 28.

Here is the full text of the statement.

IMF Staff Completes 2019 Article IV Mission to Mongolia

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.

• Mongolia has made major progress in strengthening the resilience of its economy. The authorities have appropriately used a favorable economic turnaround to pay down public debt and rebuild foreign exchange reserves.
• However, buffers are too low to withstand large shocks; the economy remains very exposed to changes in external conditions and climate change; and poverty is still high, despite years of rapid economic growth.
• The priority should be to extend recent progress, by building buffers and advancing structural reforms. Financial sector reforms, improved governance, and upgrading agriculture policies will be essential for sustainable, inclusive, and green growth.

An International Monetary Fund (IMF) team led by Mr. Geoff Gottlieb visited Mongolia from June 19 to 28, 2019, to conduct discussions for the 2019 Article IV consultations. At the conclusion of this visit, Mr. Gottlieb issued the following statement:

“Mongolia’s growth rate recovered sharply since 2016. The turnaround in real GDP growth was boosted by strong external demand for Mongolia’s mineral exports, the resumption of the 2nd phase of the Oyu Tolgoi copper mine and loosening monetary and credit conditions. In addition, the government’s improving policy mix strengthened domestic confidence.

“Mongolia is in a considerably stronger position than two years ago. Due to booming tax revenues and relatively contained expenditures, the fiscal balance has improved by 18 percentage points and public debt has fallen 13 percentage points to 75 percent of GDP (IMF definition). On external side, the Bank of Mongolia has used the strong turnaround in exports and FDI to increase net foreign exchange reserves by $3 billion since end-2016. However, the benefits have not been shared widely with rising household debt and still high poverty.

“Growth is likely to moderate due to slowing mineral demand and credit growth. However, there is both upside potential and downside risks to baseline projections. Mongolia’s narrow economic base leaves it exposed to changes in external conditions. In addition, economic prospects depend on continued budgetary and monetary discipline during the election cycle.

“Mongolia’s buffers are still insufficient to cope with downside risks. Past economic crises in Mongolia were typically due to a combination of external shocks (e.g. a sharp fall in commodity prices) and unsuitably loose fiscal and monetary policies. The results were higher debt, lower reserves, and a more depreciated exchange rate. Notwithstanding recent progress, Mongolia’s buffers remain insufficient to comfortably absorb similar pressures.

“For sufficient debt reduction, Mongolia should target a primary balance of at least 1 percent of GDP in 2019 and 2 percent of GDP thereafter. Tighter monetary policy and macro-prudential measures can ensure credit growth supports macro stability. Tighter supervision by the Financial Regulatory Commission is necessary to rein in excessive non-bank lending.

“Deep structural reforms will help reduce Mongolia’s susceptibility to boom-bust cycles. Enhancing the fiscal rules framework is important to protect fiscal discipline in coming years. Developing the transport infrastructure will strengthen the export sector. A well- capitalized banking system will be essential to finance young companies that generate growth and jobs. Finally, re-orienting public spending towards health and social protection will reduce poverty and ensure that the dividends of higher growth are more widely shared.

“Regarding governance, the 2019 OECD-Anti-Corruption Network Report highlights key priorities for reducing corruption. Enhancing judiciary capabilities for commercial issues and a modern income and asset declaration framework are particularly important. On environmental issues, Mongolia is acutely vulnerable to climate change. A pasture tax and a modern animal products industry can enhance Mongolia’s resilience and diversification.

“With respect to the IMF-supported Extended Fund Facility, completion of the 6threview remains delayed, pending completion of two prior actions. First, a forensic audit of all capital raised related to the Asset Quality Review is necessary to ensure that capital is consistent with local regulations and best practice. And second, the Bank of Mongolia has committed to take supervisory action to ensure banks raise all capital requested as part of the AQR.

“The staff team met with the Speaker of Parliament, the Minister of Finance, the Governor of the Bank of Mongolia, the Minister of Mining, Minister of Food, Agriculture, and Light Industry, other senior government officials, private sector representatives, and the financial community. The team thanks the authorities for their cooperation, constructive dialogue, and hospitality during its stay in Mongolia.”

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: TING YAN

PHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG

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Open Editorial: A better alternative to interest rate caps

The Mongolian Parliament is currently discussing the introduction of interest rate caps on lending rates by financial institutions. An interest rate cap is a ceiling on lending rates with the purported aim of lowering the cost of borrowing and protecting borrowers from predatory lending practices. The appeal of such controls on lending rates is understandable. However, international experience suggests that interest rate caps often do more harm than good.



A key concern is that when interest rate ceilings are set below “market rates” – e.g. the rate required to cover banks’ own borrowing costs and the risk of default – the result can be a shortage of credit, particularly for the least established segments of the society. This means that those without a long credit history or significant collateral – such as young borrowers, rural households, female entrepreneurs, new firms, or low-income households – are cut off from the formal credit market, leaving large segments of the society ‘unbanked’.

Another concern is that when such borrowers are excluded from the formal banking system, some will seek financing in informal credit markets. Such markets are not regulated and, as a result, supervisors are unable protect borrowers from the very type of predatory practices the interest rate cap aims to fight. Indeed, higher borrowing in informal credit markets will increase the chances of predatory lending.

It is true that a form of interest rate ceilings – known as ‘usury laws’ – are used in many countries. However, the ceilings in such laws are set at very high levels because they are only aimed at preventing predatory lending, not changing the average interest rate that most banks charge. For example, in the United States, the median ceiling for a 5-year loan is currently 10 times the level of the policy rate. The equivalent ceiling in Mongolia would be over 100 percent.

Nonetheless, average bank lending rates are indeed high in Mongolia. Adjusting for inflation, lending rates in local currency have averaged 10 percent over the last 5 years. Thus, it is reasonable for policymakers to want to find ways to reduce interest rates. But instead of using interest rate caps which can come with costly side effects, it is vital to address three underlying drivers of high interest rates.

Firstly, Mongolia has high country risk which puts upward pressure on the amount depositors or investors require to hold local currency assets rather than US dollar or foreign assets. The risk premium can be reduced by lowering public and external debt, improving banking sector supervision, and creating a reliable and stable climate for foreign investment.  


Secondly, frequent bouts of high inflation in Mongolia mean that depositors insist on high nominal rates to protect against an erosion of their savings in local currency. In turn, banks then need to charge high lending rates to cover these costs. Bringing about low and stable inflation will lower bank funding costs which can be passed on to Mongolian households and businesses. 

And third, it is difficult for banks to collect payments on defaulted loans given the current legal framework for resolving non-performing loans and constraints in the judicial system more broadly. Thus, banks charge higher interest rates to be compensated for the risk of default and their inability collect collateral.  


It is worth noting that, even at the currently high interest rates, credit growth has been excessive in the last year, rising by 25 percent. This has created important financial stability and consumer protection risks. Households have taken loans with double-digit real interest rates to finance consumption and now one out of every two households pays over 50 percent of the monthly income in debt service. Households will need sustained increases in wages, without any employment or health surprises, to repay these loans.

But, again, the solution to this is not to artificially lower lending rates with a new law. The only way to have safe and sustainable credit going forward is to have interest rates that both cover bank costs and are consistent with borrowers’ ability to pay. Thus, the focus should be the underlying reforms identified above which get at the root of these issues. And for the near-term, the recent steps by the Bank of Mongolia to introduce tighter regulations on borrowers’ ability to qualify for such loans will help limit the increase in risks.

Addressing these challenges is central to the agenda of both the government’s Economic Recovery Program and the IMF-supported Extended Fund Facility. And because of the authority’s efforts thus far, there has been progress, particularly with respect to lowering public debt. Financial markets have recognized this progress, allowing Mongolia’s country risk to fall by more than half since 2016 and real local currency lending rates have fallen by 5 percentage points over the same period.

Nonetheless, many of the core drivers of high borrowing costs remain in place and more needs to be done in reducing macro-economic vulnerabilities, strengthening banking sector supervision, and reforming the NPL resolution framework. Such actions will ensure that the financial sector not only supports overall economic growth but also ensures that such growth is shared by broad segments of the population.

Neil Saker, IMF Resident Representative in Mongolia 

May 2, 2019

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Mongolia Subscribes to the IMF's Special Data Dissemination Standard

April 2, 2019

Mongolia subscribed today to the International Monetary Fund’s Special Data Dissemination Standard (SDDS), the first case where implementation of the enhanced General Data Dissemination System (e-GDDS) has facilitated advancement to the SDDS. Under the e-GDDS, Mongolia launched a National Summary Data Page—a one-stop online publication portal—laying the foundation for moving to the next tier of IMF data standards, the SDDS. In this process, Mongolia has benefitted from a project in the Improvement of Data Dissemination in the Asia and Pacific Region, financed by the Japanese government, which aims to assist countries to improve data dissemination under IMF’s data standards initiatives.

Louis Marc Ducharme, Chief Statistician and Data Officer of the IMF, welcomed this major milestone in the country’s statistical development. “I congratulate the authorities for subscription to the SDDS. It underscores Mongolia’s strong commitment to transparency, as well as the adoption of internationally accepted best practices in statistics.”

The SDDS, established by the IMF in March 1996, is intended to guide members in the provision of economic and financial data to the public. Subscription to the SDDS enhances the availability of timely statistics according to an advance release calendar, thereby contributing to sound macroeconomic policies and the proper functioning of financial markets. Although voluntary, a subscribing member commits to observe the standard and to provide information (metadata) about its data dissemination practices. This information is made publicly available on the IMF's Dissemination Standards Bulletin Board (DSBB).

The DSBB now provides comprehensive documentation in English on the statistical practices of Mongolia for SDDS data categories, hyperlinked to country data included in the National Summary Data Page, maintained by Mongolia’s National Statistical Office. Mongolia’s SDDS information is available at http://dsbb.imf.org/Pages/SDDS/CountryList.aspx.

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: Pemba Sherpa

Phone: +1 202 623-7100Email: MEDIA@IMF.org

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IMF Continues Discussions on the Sixth Review of Mongolia’s Extended Fund Facility

January 31, 2019

• Growth remains strong and fiscal policy has been tight leading to an overall surplus in 2018.
• The authorities have taken measures to dampen excessive domestic demand that is limiting international reserves accumulation. They stand ready to tighten further.
• It is crucial that the efforts to rehabilitate the banking system are completed speedily to ensure that banks are well capitalized and adequately supervised.

An International Monetary Fund (IMF) staff team led by Mr. Geoff Gottlieb visited Ulaanbaatar during January 28–30, 2019 to continue discussions on the sixth review of the three-year Extended Fund Facility (EFF) arrangement approved on May 24, 2017, in an amount equivalent to SDR314.5054 million, or about US$434.3 million [1] (see Press Release No. 17/193 ).

At the conclusion of the visit, Mr. Gottlieb made the following statement:

“The economy continues its recovery, with growth exceeding 6 percent in 2018, amid supportive external conditions and sharply rising domestic demand. Both the strong growth and the authorities’ commitment to discipline on public spending have resulted in large over-performance on fiscal targets under the program.

“To tackle signs of overheating pressures that are a headwind on further international reserve accumulation, the Bank of Mongolia has raised the policy interest rate and introduced macro-prudential measures to rein in excessive credit growth. The authorities stand ready to tighten further if necessary.

“The rehabilitation of the banking system is a core part of the program. The IMF staff team continues to work with the Bank of Mongolia on the follow-up to the Asset Quality Review that was completed in 2017. The authorities have committed to taking decisive actions regarding the recapitalization or resolution of under-capitalized banks before the next IMF Executive Board meeting on the sixth review. Over the coming weeks, discussions with the authorities will continue from IMF headquarters.

“The team thanks the authorities for their cooperation, constructive dialogue, and hospitality during its stay in Mongolia.”

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[1] The dollar amount is calculated based on the SDR-dollar rate of May 24, 2017, equivalent to $425mn at SDR-dollar rate of 1.35274 as of February 27, 2017.

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: Ting Yan

Phone: +1 202 623-7100Email: MEDIA@IMF.org

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IMF Reaches Staff-Level Agreement on the Sixth Review of Mongolia's Extended Fund Facility

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 findings so far, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.

• Growth remains strong, led initially by buoyant external conditions and increasingly by a recovery in domestic demand. The fiscal deficit is improving much faster than expected, allowing government debt to fall sharply. The authorities are on track to meet all macroeconomic targets for end-year.
• Two important vulnerabilities are that international reserves and bank capital are still not at appropriate levels. Macro-economic policies should be used to dampen high credit growth and help build external buffers. Meanwhile, it is crucial that banks complete the recapitalization efforts started in 2017.
• For 2019, program goals are to continue reducing public debt, resume international reserve accumulation, and ensure the banking system is well-capitalized. In addition, it is critical that the authorities strengthen the investment climate to attract the foreign capital necessary for Mongolia’s long-term growth.

An International Monetary Fund (IMF) staff team led by Mr. Geoff Gottlieb visited Ulaanbaatar from November 7-17, 2018 to conduct discussions on the sixth review of the three-year Extended Fund Facility (EFF) arrangement approved on May 24, 2017, in an amount equivalent to SDR314.5054 million, or about US$434.3 million (see Press Release No. 17/193 ).
At the conclusion of the visit, Mr. Gottlieb made the following statement:
“As we reach the mid-way point of the IMF supported program, significant progress has been made by the authorities in overcoming the economic crisis. Growth has revived to over 6 percent, the overall fiscal balance has swung from a large deficit to a small surplus, and government debt has fallen sharply. While the external environment has been supportive with buoyant export demand, the recovery has become broader based with consumption and investment rising sharply. Against this backdrop, the authorities are on track to meet all end-December macroeconomic targets, including the fiscal deficit and net international reserves.
“While welcome, this recovery brings new challenges. Stronger domestic demand conditions are widening the current account deficit, halting reserve accumulation. In response, the Bank of Mongolia should rein in high credit growth through tighter monetary conditions and the introduction of well-targeted macro-prudential measures.
“In the financial sector, the follow-up to the Asset Quality Review that was completed in 2017 is entering its final phase. Those banks that were found to be undercapitalized have until end-December to raise the necessary new capital. Banks that fail to do so will face Central Bank intervention or be resolved as per the Banking Law.
“The authorities are also moving ahead with reforms that will allow for more rapid resolution of non-performing loans, strengthen their Anti Money Laundering framework, and improve the selection and appraisal of public investment projects. Given the importance of attracting more foreign capital, the authorities should also commit to strengthening the business and investment climate.
“The authorities and the IMF team have reached staff-level agreement on the economic policies for completion of the sixth review under the EFF arrangement, which is subject to the approval of the IMF Executive Board. The authorities have committed to several actions, mainly in the financial sector, that will be completed before the Executive Board meeting.”
The team thanks the authorities for their cooperation, constructive dialogue, and hospitality during its stay in Mongolia.

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: Ting Yan
Phone: +1 202 623-7100Email: MEDIA@IMF.org

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Mongolia to obtain 5th tranche of funding from IMF

ULAN BATOR, Nov. 1 (Xinhua) -- Mongolia will soon receive the fifth tranche of funding from the International Monetary Fund (IMF), equal to around 36.22 million U.S. dollars, the country's central bank said Thursday.

The amount is part of the IMF's three-year Extended Fund Facility (EFF) for Mongolia totaling about 434.3 million U.S. dollars, which was approved at the meeting of the IMF Executive Board on May 24, 2017.

According to the Bank of Mongolia, the IMF Executive Board completed the fifth review of Mongolia's performance on Wednesday under the program.

"Mongolia has continued to make good progress under the Fund-supported program," Mitsuhiro Furusawa, deputy managing director of the IMF, said after the Executive Board's discussion.

"Helped by favorable commodity exports, a recovery in confidence, and strong program implementation, growth has accelerated further, leading to improvements in the fiscal position and debt dynamics," said Furusawa, who is also the acting chair of the IMF Executive Board.

"The fiscal accounts have posted a primary surplus, reflecting both a sharp increase in revenues and continued expenditure restraint. Meanwhile, past over-performance allowed the authorities to meet key reserve targets, despite a recent rise in balance of payments pressures," Furusawa said.

"However, Mongolia remains vulnerable to external and domestic shocks. Thus, the country's authorities should take advantage of the still favorable economic environment to further bolster fiscal and external buffers, strengthen the banking sector, and improve the investment climate," he said.

The authorities should continue efforts to protect social spending, strengthen tax administration, and improve public financial management, he added, stressing that a dedicated implementation of the authorities' reform program is key to building resilience against shocks and ensuring sustainable and inclusive growth.

Thanks to the IMF's program, Mongolia's gross domestic product (GDP) grew 5.1 percent year on year in 2017, higher than the 3.3 percent forecast by the IMF.

The IMF has predicted that Mongolia's GDP growth will reach 5 percent this year and 6.3 percent next year.

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IMF Executive Board Completes Fifth Review under the Extended Arrangement for Mongolia and Approves US$ 36.22 Million Disbursement

October 31, 2018

• Mongolia continues to perform well under the Fund-supported program, posting strong economic growth and significant over-performance on key fiscal targets.
• Select banks are in the process of addressing capital shortfalls identified by the Asset Quality Review by the end-December 2018 deadline.
• With still high public and external debt, the authorities’ dedicated implementation of reform program is key to build resilience against shocks and ensure sustainable and inclusive growth.

On October 31, 2018, the Executive Board of the International Monetary Fund (IMF) completed the fifth review of Mongolia’s performance under the program supported by a three-year extended arrangement under the Extended Fund Facility (EFF). Completion of the review enables Mongolia to draw the equivalent of SDR 26.2088 million (about US$ 36.22 million), bringing total disbursements under the arrangement to SDR 157.2454 million (about US$ 217.33 million).
Mongolia continues to perform well under the program. The combination of strong policy implementation and a supportive external environment has helped the authorities meet all end-September 2018 quantitative targets under the program, with significant over-performance on fiscal targets. Progress has also been made on structural reforms, albeit with some delays.
Mongolia’s three-year extended arrangement was approved on May 24, 2017, in an amount equivalent to SDR 314.5054 million, or about US$ 434.3 million1 at the time of approval of the arrangement (see Press Release No. 17/193 ). The government’s Economic Recovery Program, supported by the IMF, aims to stabilize the economy, reduce the fiscal deficit and debt, rebuild foreign exchange reserves, introduce measures to mitigate the boom-bust cycle and promote sustainable and inclusive growth.
Following the Executive Board’s discussion of the review, Mr. Mitsuhiro Furusawa, Acting Chair and Deputy Managing Director, said:
"Mongolia continues to make good progress under the Fund-supported program. Helped by favorable commodity exports, a recovery in confidence, and strong program implementation, growth has accelerated further, leading to improvements in the fiscal position and debt dynamics. The fiscal accounts have posted a primary surplus, reflecting both a sharp increase in revenues and continued expenditure restraint. Meanwhile, past over-performance allowed the authorities to meet key reserve targets, despite a recent rise in balance of payments pressures.
“In the financial sector, the focus remains the follow-up to the Asset Quality Review (AQR). Select banks are in the process of booking the results of the AQR and subsequent on-site inspections. They are also now raising the needed capital to address identified shortfalls by the end-December 2018 deadline. The Bank of Mongolia will remain focused on ensuring financial sector stability throughout the process.
“Notwithstanding this progress, Mongolia remains vulnerable to external and domestic shocks. It is therefore crucial to take advantage of the still favorable economic environment to further bolster fiscal and external buffers, strengthen the banking sector, and improve the investment climate. In addition, the authorities should continue efforts to protect social spending, strengthen tax administration, and improve public financial management. A dedicated implementation of the authorities’ reform program is key to build resilience against shocks and ensure sustainable, inclusive growth.”

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: Ting Yan
Phone: +1 202 623-7100Email: MEDIA@IMF.org
 

 

 

 

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Statement by the IMF Mission on the Fifth Review of Mongolia's Extended Fund Facility

August 7, 2018

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.

An International Monetary Fund (IMF) staff team led by Mr. Geoff Gottlieb visited Ulaanbaatar from July 25 to August 6, 2018 to conduct discussions on the fifth review of the three-year Extended Fund Facility (EFF) arrangement approved on May 24, 2017, in an amount equivalent to SDR314.5054 million, or about US$434.3 million [1] (see Press Release No. 17/193).

The discussions focused on the implementation of the Fund supported program, the medium-term outlook, and policies and structural reforms needed for debt sustainability, the rehabilitation of the financial system, and high-quality growth while protecting the poor.

At the conclusion of the visit, Mr. Gottlieb made the following statement:

“The mission held productive discussions with the authorities on the policies needed to complete the fifth review under the EFF arrangement. Recent macroeconomic performance has been strong with key targets met and growth is reviving although significant vulnerabilities remain.

“Good progress has been made especially regarding structural reforms and policies to rehabilitate and strengthen the financial sector. Discussions including on the macroeconomic policy mix will continue in the near future.

“The team thanks the authorities for their cooperation, constructive dialogue, and hospitality during its stay in Mongolia.”

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[1] The dollar amount is calculated based on the SDR-dollar rate of May 24, 2017, equivalent to $425mn at SDR-dollar rate of 1.35274 as of February 27, 2017.

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: TING YAN

PHONE: +1 202 623-7100EMAIL: MEDIA@IMF.ORG

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