Since the beginning of 2017, all of the gold sold to the Bank of Mongolia (BoM) by domestic entities and individuals has been used to increase foreign currency reserve of the country, reports the central bank.
Over the last years, the BoM had borrowed short-term loans from foreign banks with a condition to repay it with gold. Some officials of the Bank say that the loans' cost was high, the terms were too short and the condition of repayment was not economically efficient. For example, the Bank borrowed USD60 million in 2014 and USD160 million in 2015 with an interest rate of 9.3 per cent and a total of 12.1 tons of gold was sent for the loan repayment in 2014-2016.
Starting last August, the authorities of BoM has been adhering to a principle to stop getting loans and to fully repay all loans and as a result of this action, all loans of the central bank were repaid.