A.Batsukh: Tugrug Rate Is Getting Tightened

Apr 28 • Business, Economy, Government • 692 Views • No Comments on A.Batsukh: Tugrug Rate Is Getting Tightened

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In recent days a fear that tugrug rate might fall down is among the public. Halting of lending by commercial banks contributed to this guesstimate. Last Friday, authorities of Ministry of Finance and the Mongolbank expressed their positions officially.
Ch.Ulaan, Minister of Finance highlighted that Mongolian economy and finance goes through a not so easy phase due to sudden internal and external factors. Because of instable commodity price in the market, state budget expenditure increased and exceeded the planned amount, which might create a lot of debt.
Also the Minister warned about a new demand for implementing wise economic policy, not declining purchasing power of consumers and government organizations should learn parsimony. Ch.Ulaan promised that the Government would never make a decision to let tugrug rate fall down.
A.Batsukh, Governor of Mongolbank informed that main macro economic indicators were good. He also noted that the primary goal of Mongolbank was to keep inflation minimum and this time the Mongolbank would not go back from this goal. A.Batsukh said, “It was recently informed that commercial banks halted their lending.
Lending of commercial banks increase. As of the first three months of this year, loans provided by banks increased by 66 percent in comparison to that of the previous year. Therefore, the Mongolbank gave cautions to commercial banks that money in the market was higher than proper level. Rumors such as proper lending amount exceeded and tugrug rate would fall down affected banks. Thus commercial banks heightened their lending criteria. Mongolbank warned that proper lending amount has exceeded but it didn’t direct them to stop lending because it has no authorizing right to do so. We previously denied the rumor on tugrug rate fall-down. And again we responsibly say that don’t even think that tugrug rate would fall down.”
Afterwards, they responded to journalists.
J: – What is the reason of increasing USD rate in Mongolia while it drops down in the world market?
A.Batsukh: – The Mongolbank adheres to a policy of tightening ratio between USD and Tugrug rate. According to the information of the last month, tugrug rate began to get tightened. It is in the right route.
J: – It is said Atar 3 might be in a difficult condition because commercial banks don’t provide lending to them.
Ch.Ulaan: – The Government and the Mongolbank do the bests to have spring plantation started on time. It is false information that banks don’t provide lending but what is true is that they don’t provide loans to everyone who wants. They are authorized to examine the projects and applications for loan. Firsts of farmers already signed on loan agreements. MNT 93 billion is budgeted for soft loan to farmers.
J: – How reliable is the conclusion “Mongolbank’s increase of its policy rate brought adverse effect on the economy. Could you please tell us the inflation rate at the moment?
A.Batsukh: – Inflation increases when a proper monetary ratio is lost in the market. The Mongolbank increased its policy rate as the salary is increased by 4 times creating inflation. Increasing policy rate is a warning. In other words, it is the policy to keep tugrug rate stable, preventing from unpleasant economic effects. According to the most recent survey, inflation rate was 7.9 percent. In the future inflation would fall down since the Mongolbank carried out particular measures.

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