We deliver you the highlights of events that was held in Mongolian economic sector in March 2017.
US$ 850 MILLION SOFT LOAN FROM JAPAN TO BE GRANTED AT THE END OF 2017
Speaker of the State Great Khural M.Enkhbold paid an official visit to Japan on Mar 28-30th, 2017. During the visit, he met with Japanese Prime Minister Shinzo Abe. Meanwhile, Shinzo Abe announced to grant a US$ 850 million soft loan to Mongolia, in scope of IMF`s ExtendedFund Facility program.
Ambassador Extraordinary and Plenipotentiary of Japan to Mongolia Masato Takaoka stated that concept of the soft loan will be discussed after approval of IMF`s board of directors on Extended Fund Facility Program. We could not provide details at that time. Of course, we will consider the needs of Mongolia.
US DOLLAR HAS BEEN DECLINING GRADUALLY FOR THREE MONTHS
Selling rate of US$ 1 was at MNT 2467 in the beginning of March. It has decreased by 0.75 percent and reached MNT 2452 at the end of March.
Tugrik, the Mongolian currency has continued to appreciate against the US Dollar since July 2016.
IMF`s stand-by program, US$ 500 million loans from South Korea and negotiation to receive US$ 800 million loans from Japan brought positive change in the currency market, causing an increase in Tugrik rates.
MINERAL RESOURCE AUTHORITY: GOLD PRICE TO RISE FURTHER
“Mongolia Gold 2017” conference for gold industry investors was held at Chinggis Khaan Hotel, Ulaanbaatar city on Mar 17, 2017. A total of 3546 mining licenses were registered at Mineral resource authority, of which 1642 of them are gold exploration and mining licenses. Gold exploration and mining licenses account 46 percent of total licenses.
After the implementation of Gold-2 program, gold production is expected increase and reach 25 tons per year by 2050. In 2016, individuals and entities sold 23 tons of gold to Bank of Mongolia.
Even gold price in global market has risen, gold production decreased in our country since 2009, which affected by 68 percent of windfall profits tax.
Thus, Government of Mongolia declared to implement Gold-2 program which aims to increase gold production by providing concessional loans and creating a favorable tax environment.
ERDENES TAVAN TOLGOI PAID OFF ITS DEBT TO CHALCO
Erdenes Tavan Tolgoi JSC paid off its debt to China’s aluminum company, Chalco. A total of USD 420 million was paid under the contract established in 2011 between the Chalco and the Government of Mongolia.
However, we must note that the contract has not ended and it is valid until 2027. Only the amounts of coal deliveries from the East Tsankhi mine to Chalco has changed.
During the first phase of the contract, Erdenes Tavan Tolgoi supplied 100 percent of its coal deliveries from East Tsankhi pit to Chalco.
At the second phase of the contract which will be finished in 2022, Erdenes Tavan Tolgoi to supply 80 percent of its coal deliveries from East Tsankhi pit to Chalco.
Moreover, the company must pay US$ 200 million loans within July 201, granted by Development Bank in 2012.
GOVERNMENT DEBT REACHES MNT 934 BILLION
In the first quarter of each year, Ministry of Finance actively trades government securities and bonds through Bank of Mongolia (BoM) and Mongolian Stock Exchange (MSE) due to State budget revenue decreases in the first months of each year.
As Ministry of Finance releases securities, domestic loans of the Government increases.
BoM sold MNT 744 government securities and MSE sold MNT 190 billion government securities to commercial banks and brokerage firms at 16-17 percent interest rates during Jan 1, 2017 to Mar 31, 2017.
However, the Government should focus on boosting the investment instead of selling bonds and securities.
COMMODITY PRICES AS OF MARCH 2017
As of Mar 29th, commodity prices have increased by 8.9 percent compared to the previous month.
Mutton prices increased by 18 percent, prices for beef with bones increased by 10 percent, prices for horse meat with bones increased by 6 percent compared to Feb 2017.
Flour prices rose by 2.7 and prices for rice and sugar rose by 0.4 - 5.8 percent.
Prices for potato decreased by 1.7 percent while cabbage price increased by 54 percent.
Meanwhile, packed 1L milk price increased by 4 percent and egg prices rose by 12 percent.
OTHER EVENTS HELD IN ECONOMIC SECTOR
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