gogo logo
  • Монгол
  • Yolo
  • Maamuu
  • Politics
  • Economy
  • Society
  • Life
  • Interview
  • Culture
  • TRAVEL
  • Ulaanbaatar
  • Media OutReach
Helpful
Interview
  • - Interview
Interesting
Other
Монгол
Maamuu
Yolo
Main menu
Politics
Economy
Society
Life
Interview
Culture
TRAVEL
Ulaanbaatar
Media OutReach
Helpful
Interview
Interview
Interesting
Other menu
Монгол
Maamuu
Yolo
Contact us
Editorial ethics
Home
Search
Menu
  Facebook   Twitter
  Menu
Home
/ Economic
Economy

BoM may restrict FX withdrawal if Parliament passes bill on currency

  Facebook   Tweet
  Facebook  Tweet

BoM may restrict FX withdrawal if Parliament passes bill on currency

​LAW ON CURRENCY REGULATION WILL ALLOW BOM TO CONTROL FX FLOW​

The Bank of Mongolia (BoM) included an article that can allow the bank to temporarily restrict withdrawal and transfer of foreign exchange on the draft Law on Currency Regulation, which was passed by the Parliamentary Standing Committee on Economy.

BoM explains the article is aimed at maintaining financial stability and reduce dollarization as trade deficit pressures the currency rate. Furthermore, it will allow the bank to control currency rate during sharp volatility. In the first eight months of 2018, the balance of payment totalled USD 361 million in deficit. Within the frames of the International Monetary Fund’s Extended Fund Facility arrangement, Mongolia agreed to have a foreign exchange (FX) reserves of 1-year of average import purchase.

Foreign exchange control will reduce investment, warn economists

Officials highlighted that Mongolia’s current FX reserves can cover six months of import purchase. The BoM set a goal to continue the reform in banking and financial sectors on the 2019 Monetary Policy Guidelines. Thus, several bills will be prepared within the frame. 

For instance, the bills on Financial Consumer Protection, Development of Secondary Market for Asset Management and Improvement of Legal Regulation of Treasury. The economist club of Bloomberg TV Mongolia highlighted that the Government’s control on fx in and outflow has a negative effect of reducing investment.

On the contrary, the BoM views the draft Law on Currency Regulation will reduce FX risks. “The flexibility of currency rate will help protect the economy from foreign shock and boost export competitiveness,” highlighted the Governor of BoM Bayartsaikhan Nadmid.

Furthermore, the bill on Financial Consumer Protection will be a strong impetus in reducing interest rate. The bank explained that the lack of identification of financial consumer brought them into an uncertain situation, ultimately harming their rights. The Parliament is expected to discuss the bill soon. 

​LAW ON CURRENCY REGULATION WILL ALLOW BOM TO CONTROL FX FLOW​

The Bank of Mongolia (BoM) included an article that can allow the bank to temporarily restrict withdrawal and transfer of foreign exchange on the draft Law on Currency Regulation, which was passed by the Parliamentary Standing Committee on Economy.

BoM explains the article is aimed at maintaining financial stability and reduce dollarization as trade deficit pressures the currency rate. Furthermore, it will allow the bank to control currency rate during sharp volatility. In the first eight months of 2018, the balance of payment totalled USD 361 million in deficit. Within the frames of the International Monetary Fund’s Extended Fund Facility arrangement, Mongolia agreed to have a foreign exchange (FX) reserves of 1-year of average import purchase.

Foreign exchange control will reduce investment, warn economists

Officials highlighted that Mongolia’s current FX reserves can cover six months of import purchase. The BoM set a goal to continue the reform in banking and financial sectors on the 2019 Monetary Policy Guidelines. Thus, several bills will be prepared within the frame. 

For instance, the bills on Financial Consumer Protection, Development of Secondary Market for Asset Management and Improvement of Legal Regulation of Treasury. The economist club of Bloomberg TV Mongolia highlighted that the Government’s control on fx in and outflow has a negative effect of reducing investment.

On the contrary, the BoM views the draft Law on Currency Regulation will reduce FX risks. “The flexibility of currency rate will help protect the economy from foreign shock and boost export competitiveness,” highlighted the Governor of BoM Bayartsaikhan Nadmid.

Furthermore, the bill on Financial Consumer Protection will be a strong impetus in reducing interest rate. The bank explained that the lack of identification of financial consumer brought them into an uncertain situation, ultimately harming their rights. The Parliament is expected to discuss the bill soon. 

  Facebook   Tweet
Category
Economy
Published
2018-10-15


gogo logo
Contact us Editorial ethics

© 2007 - 2025 Mongol Content LLC