IMF Board to discuss Mongolia`s request next Wednesday


2017-05-17 15:00 GMT+8

Ulaanbaatar /MONTSAME/ The International Monetary Fund Executive Board is scheduled to discuss Mongolia's request to implement Extended Fund Facility (EFF) during its meeting on May 24. Minister of Finance B.Choijilsuren was interviewed on this matter and other issues concerning the EFF program.

-Has the meeting schedule of the IMF Executive Board been confirmed? Is there a guarantee that the meeting will not be delayed again?
-Deputy Governor of Bank of Mongolia and I attended the spring meeting of Asian Development Bank on May 08, during which we met with relevant IMF officials and confirmed the meeting schedule.

-Do initial agreements and funding remain the same? Would there be any change?
-The total financing package within the EFF will be around USD5.5 billion. USD2.2 billion of it covers an extension of swap line of the People’s Bank of China with the Bank of Mongolia. IMF will provide loans of USD440 million with 15-year term. The loan will be less than 2 per cent interest and the loan principal will not be repaid over the first 5 years. The Asian Development Bank will grant a loan of USD900 million, of which USD600 million will be spent for recovering state budget deficit and USD300 million for funding programs and projects. The World Bank pledged USD600 million with less than 2 per cent interest and 15-year term and we agreed to spend USD440 million of it for recovering state budget deficit in 2017-2019. Japan and South Korea are expected to together provide loans of USD1.3 billion.

-When programs and projects start to be implemented and when the funding is provided?
-We will not implement it directly. Ministries are preparing feasibility studies of projects to use the loans. After completion of feasibility studies by the second quarter of 2017 and in 2018-2019, the funding will be disbursed.

-A request to postpone the realization of increased excise tax on passenger vehicles has been submitted. Is it possible to accept the request?
-An increase of 7 types of taxes in stages to raise budget revenue has been agreed in detail with IMF within the policy. Therefore, it cannot be changed by a group of people. IMF has 182 member countries and the Executive Board has 24 members. It is difficult to make all members understand our internal problems. Increased tax took effect from the beginning of this month. In connection to the excise tax increase, customs organization worked extended hours during the last working days of April and over 1000 hybrid cars were imported.

-Concerning the EFF implementation, some people criticize that government has given the country’s economic freedom to foreigners. What is your comment on it?
-The situation was very hard when the Government got its authority on July 30, 2016. Then, we asked assistance from IMF, which put its requirements to decrease budget deficit and create debt stability. We had no choice because, if we did not accept the IMF program, the economy would have been bankrupted. The EFF will have positive effects on the economy.

-How fruitful was the Prime Minister’s visit to China or how much benefit will the economy get from the visit?
-The Parliamentary Speaker visited China in autumn of 2016 and forwarded two requests; to increase the quota of our traditional export products in 2017-2018 and to give support by creating a market. During the Foreign Minister’s visit, China expressed its position to accept the requests and increased quota of coking coal and iron ore to be exported from Mongolia and their prices have grown up. The PM’s recent visit was a continuation and next step of this policy.  

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