The government bond trading at the secondary market reached to the worth of MNT 347.1 billion as of first 9 months of 2015.
It is increased by MNT 226.2 billion or 2.9% from the same period of the last year, reported National Statistics Committee.
The Ministry of Finance continuously issues government bonds via Mongol Bank in order to reduce the state budget deficit. There is still high demand for mid-term government bond with annual interest rate of 14-15%. However, the issues of the bond is being blamed by Banks Association of Mongolia that it negatively affects the competitiveness of domestic commercial banks. The reason is that individuals and entities are eager to invest in the government bond, considering that it is a more reliable investment source with much less risk.
If money invested in the government bond is instead held as savings by commercial banks, it would have been more fruitful for local economic development as it is reinvested and managed by commercial banks.
On the other hand, there are a number of economists who still endorse the issue of the government bond. According to them, it is better approach to increase the volume of the internal debt rather than that of the external debt which has been unbalanced.
The government bond trading at the secondary market reached to the worth of MNT 347.1 billion as of first 9 months of 2015.
It is increased by MNT 226.2 billion or 2.9% from the same period of the last year, reported National Statistics Committee.
The Ministry of Finance continuously issues government bonds via Mongol Bank in order to reduce the state budget deficit. There is still high demand for mid-term government bond with annual interest rate of 14-15%. However, the issues of the bond is being blamed by Banks Association of Mongolia that it negatively affects the competitiveness of domestic commercial banks. The reason is that individuals and entities are eager to invest in the government bond, considering that it is a more reliable investment source with much less risk.
If money invested in the government bond is instead held as savings by commercial banks, it would have been more fruitful for local economic development as it is reinvested and managed by commercial banks.
On the other hand, there are a number of economists who still endorse the issue of the government bond. According to them, it is better approach to increase the volume of the internal debt rather than that of the external debt which has been unbalanced.