Mongolia Business and Mongolian Daily Business News

MP Z.Enkhbold shares his opinion on recently occurring banking turbulence and he says “Bank bankruptcy is nothing serious, almost every day banks go bankruptcy”

Q: “Zoos” bank was overtaken by the Government and Government bond is about to be offered. Was it because of the Government guarantee on saving accounts? Shall the Government bear the responsibility of bank’s loss?

MP Z.Enkhbold: Many banks were bankrupted in last 20 years and the state paid their losses. Every time, when such action was occurred, the officials explained that its loss would be paid back by people who borrowed from banks. Read the rest of this entry »

Not long ago Mongolbank increased its interest rate from 9.75 to 14% and it was widely critisized by public and economists. But yesterday, Board of Directors of Mongolbank held a meeting and made decision to decrease its rate by 1.25%, down to 12.75%.

After this decision, Mongolbank decreased its loan rate to commercial banks by 1.25%. Mr. L.Purevdorj, President of the Mongolbank, informed as follows: Read the rest of this entry »

Economists said that the world economy crisis would affect the Mongolian economy in minor extent. But this crisis knocks the door of our economy through the stock price fall at the Mongolian Stock Exchange. Mongol Bank informed that commercial banks’ saving hadn’t decreased. Banks’ minimum reserve is increased since 1998 and it reached 8 billion MNT in April 2006. Read the rest of this entry »

Irregular Cabinet Meeting was held and discussed about the Government Agenda and housing and real estate issues, which was the main dialogue of recent days.
The Government drafted a new law on mortgage and proposed to the State Great Khural. But the new parliament decided to take comment from the new Government on this draft. Therefore, until proposing new draft law on mortgage, Government decided to take joint measures together with the Bank of Mongolia on activating commercial banks activities in mortgage loan and loan secured by the real estate. Read the rest of this entry »

The President of MongolBank A.Batsukh and the First Deputy President D.Enkhjargal made the Press Conference on the Monetary Policy of the year 2009.
The principle of the State on the monetary policy was made in three years since year 2007 and it will be amended every year if necessary. According to the main principle of state monetary policy, the inflation rate of year 2009-2011 will be 9.5% in average, 12% in the end of the next year, 10% at the end of year 2010 and 6.5% at the end of the year 2011. The monetary and fiscal policy will be focused mainly on decreasing inflation and securing social welfare in Mongolia. Also the draft amendment on the Central Bank Law to establish Monetary Policy Committee was planned. Read the rest of this entry »

As of the end of last year, our economy went up by average 8.7 percent for last 5 years. GDP per capita increased by 2.9 times, reaching USD 1.5 thousand. State budget balance showed positive indications since 2005 and share of foreign loan in GDP decreased by 2.5 times, reaching 40 percent in comparison to previous 5 years. These detailed numbers were mentioned at the seminar on Statistics on balance of payment and foreign investment position, jointly held by the Mongolbank and Ministry of Finance last Friday.

International Department of the Mongolbank reported on statistical theory and methods on balance of payment and foreign investment position, outline on foreign economy and market in the years between 2004 and 2008 and domestic currency market, which was of great interest to the participants. Read the rest of this entry »

In purpose of implementing “National Payment System” project, Mongolbank announced international tender to conduct RTGS, which stand for Real Time Gross Settlement, and signed an agreement with tender-winner, Stockholm-based CMA Small System Company of Sweden. RTGS is an online system for settling transactions of banks. In the 1990s, many countries initiated this new system for their domestic financial transaction.
RTGS system usually controlled by Central Bank and it is suited for low-volume, high value transactions. It lowers settlement risk, besides giving an accurate picture of an institution’s account at any point of time.

Majority of budget of our country comprises of 68 percent taxation or price increase of some products. This taxation is imposed on copper and gold. Yesterday, Economic Standing Committee of the Parliament discussed the draft law, initiated by the Government on nullifying the provision on imposing 68 percent windfall tax on gold. Members of the Democratic Party Council agree with this proposal. Gold mining did not drop down since imposing windfall tax on gold, however there is a fact that handing over gold to the Mongolbank reduced dramatically. MPRP group added gold to the 68 percent windfall tax on copper, initiated by members including N.Batbayar when the draft law was submitted for discussion. If the Government proposal is supported, windfall tax will no longer be imposed on gold and loyalty tax rate will be increased.

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. Read the rest of this entry »

A group of Democratic Party in the Parliament of Mongolia held a restricted meeting yesterday and discussed laws and regulations to be discussed this week. With reference to 68 percent windfall tax on gold, the Parliament is to discuss draft law on modifications to Bank law and Treasury law. The draft law says that gold should be traded through Mongolbank but no through commercial banks. DP Group members didn’t support it. In connection with the above draft law, Micro mining draft law has been discussed as well. The Government decision, coinciding with this draft law, conflicts with the draft. Since there is a Government resolution, even the related regulation is not ratified, local Governors already started to grant land for micro-mining purposes. Read the rest of this entry »