Ulaanbaatar /MONTSAME/ Parliament plenary meeting on January 12 has passed amendments to the law on Central Bank with 69.1 percent vote.
The amendments renewed legal status of MongolBank or its independence and decision making process in accordance with best practices and principles adhered by central banks of other countries. The amended law on Central Bank and related laws, set to be effective April 1 2018, will limit budgetary operations not related to the purpose of the BoM and ensure the bank’s independence from Government, having interactions with it within regulations of law. The law is expected to contribute to long-term economic growth by creating legal environment for development and implementation of proper monetary policy and maintenance of financial and price stability.
MP D.Damba-Ochir commented, “Laws on Central Bank have been amended to ensure financial stability during economic crisis. Any decision will be collectively reached by four councils and one committee, taking away some of Governor’s power. Now, BoM will be able to examine commercial banks and promptly take necessary measures. Decisions on monetary policy will be made collectively and approved by the Governor. In addition, MongolBank is banned to issue loans for social welfare programs and projects. It will issue loans to commercial banks and Government when it is necessary.”
BoM’s Vice Governor B.Lkhagvasuren concluded, “The purpose of the amendments is to create a legal basis for having an international standard Central bank. It is also aimed to improve governance of central bank by shifting to collective decision making and to update monetary policy instruments.”