President, Bank of Mongolia N.Zoljargal: There is a solution that would hinder the further depreciation of MNT
Mongolian tugrik has been depreciating against USD for the last year. Then, this week it reached the record high of 1800 MNT per USD comparing to 1350MNT a year ago.
President of the Bank of Mongolia N.Zoljargal briefed the press on currency volatility, monetary policy and overall economy of the country. He stated that for the last 5 years the trade balance has been in deficit, and coal price has been weak, which is the main export commodity made the country’s domestic currency to depreciate. However, coal price is tending to rise and foreign investment has started becoming positive, he added. First 2 months of this year, Mongolia received FDI of USD280 million. Accroding to N.Zoljargal, trade balance has been balanced for the first time in years, and the bank believes that MNT1700 per USD is a suitable number for trade balance.
The gold commissioning to the bank has risen from 500 kg to 1300 kg comparing to the same date last year. The amount of gold will be sufficient to what we are losing from coal.
The Prime Minister added that currency appreciation does not only depend on the central bank, also it depends on private sector, “We must produce domestically” he emphasized.
In the end of the meeting N.Zoljargal concluded that the bank has enough foreign currency reserves and it has all the tools it needs to maintain the current rate.