Yesterday, Meeting of the economic Standing Committee got informed by the Governor of Mongolbank. Mongolbank had to maintain inflation rate at 6 percent but it let it up to 20 percent which means they had increased the rate by 3.5 times than the level it should be. Therefore it is hard to say that they are performing the obligations in charge of. They explain the reason of tugrug rate fall was salary increase of public servants and state social welfare provided to the public.
Of course, they didn’t skip to mention the price increase of oil, wheat and food stuffs at the world market. It is said that inflation rate would be kept at 6 percent if these things didn’t happen. Along with the misery information on their strict control over money supply, report of Steering Committee of the Mongolbank was heard. Members got replies to their questions after such poor and unreliable information flow.
Ts.Bayarsaikhan: -The Mongolbank considered that money supply affected on CPI, which was between 17 and 18 percent in the first four months, to reach 20 percent at the end of this year. What did Mongolbank have to do to regulate monetary supply? During ratification of monetary policy by the parliament, discussion on creation of reserve fund from particular amount of currency reserve had failed. But now a tax exemption is being discussed. Which is the appropriate way: creation of reserve fund or tax exemption?
Kh.Narankhuu, Minister of Industry and Trade: -An action plan on neutralizing oil price increase is being formulated. The Government is to get informed on it specially. The price goes up continuously. If it increases and decreases for a particular period, reserve can be purchased when the price is declined and used afterwards. But it won’t happen. Thus, tax exemption and reserve fund would be efficient for a particular period only. Tax exemption solves a matter of MNT 100-200.
A.Batsukh, Governor of Mongolbank: -70 percent of annual inflation is on import goods, which means we import inflation. Tax exemption is vital today.
D.Bat-Erdene: -Yuan and ruble rates go up. With reference to it, can’t you tighten up tugrug rate?
A.Batsukh: -Mongolbank studies Yuan and Ruble rates. Money remittance from Mongolian citizens, residing overseas and foreign investment tend to increase. Therefore it is not necessary to tighten or loosen rate intentionally in this case.
Ts.Tsengel: -Commercial banks offer lending to major companies. Now, interest rate of small loans went up. No loans are available for plantation and farming. Why?
A.Batsukh: -Loan outstanding, provided by commercial banks for agriculture, is MNT 176 billion. Loan demand has increased. Some banks modified their interest rates and made requirements tighter.
G.Batkhuu: -Precious metals are of interest. Where has the gold gone, mined by ninjas and traded by exchangers.
A.Batsukh: -Mongolbank adheres to a policy of liberalizing gold market. Due to windfall tax of 68 percent, gold submission has declined. Mongolbank should not participate in gold market as monopoly. In 2005, the maximum or 15,2 tons gold was submitted. However in 2006 and 2007, it dropped down to 10 and 9 tons.
How about the gold mining?
In 2006 131 entities mined 22,7 tons, and in 2007 107 entities mined 17,3tons gold.
Governor of Mongolbank did not provide particular reply to the questions, “Why you don’t have any particular information. Gold consumption in Mongolia didn’t increase. Could we get it that 8.6 tons gold had not been submitted to the Mongolbank?’
Z.Enkhbold: -Russian inflation rate is 10 percent and Chinese is…Why it reached 20 percent in Mongolia while inflation rate in our neighborhoods is low? Victims of inflation are those with low incomes. You have to maintain inflation rate at 6. Why do you act as an observer today?
A.Batsukh: -Wheat and oil supplement of the two countries are good. Inflation rate of China is 6 percent. It is difficult to supply such products.
Is accreditive for 100 thous. tons wheat open?
N.Batsuuri, State Secretary of Food and Agriculture Ministry: -Not 36 mill, but 23 mill is open. The remainder can be dealt with.
Where does Ayurzana, Head of Steering Committee of Mongolbank get salary?
Ayurzana: -I am paid at the consent of Mongolbank Governor and Economic Standing Committee.
You have lost money to Malaysia.
A.Batsukh: – You can’t say so.
Then, tell a time
Why do you lie to get much more crop with one hand while carrying money with other hands, huh?
No lending is halted.