Parliament adopts state monetary policy for 2020Politics
Ulaanbaatar/MONTSAME/. The Parliament discussed and adopted a resolution on the Basic Guidelines for 2020 State Monetary Policy with 56.1 percent votes on December 5.
During the meeting, MP J.Bat-Erdene presented a report of the working group responsible for preparing the draft resolution for the final consideration. “The first discussion of the draft resolution was held at the plenary meeting of the parliament on November 21. It was discussed as a final version at the meeting of Parliament’s Standing Committee on Economy on December 4. In doing so, proposals and suggestions raised during the first discussion were reflected in the final version,” said MP J.Bat-Erdene.
Regarding the resolution, MP B.Battumur said that the banking system has changed in recent two years, with 6-8 percent growth of economy and decrease in unemployment, and highlighted that the central bank’s deficit, which was previously amounted at MNT3 trillion, dropped to MNT1.5 trillion. Foreign exchange reserves have currently reached USD 4 billion, but it still requires to be increased by USD 1 billion according to the calculation of international methodology.
Mr.Battumur stressed that exchange rate of Mongolian Tugrug against US dollar is not stable due to recent grey-list matters. Thus, the money supply should be analyzed, he suggested. “Besides, attentions should be paid on external debt issue. The bad loan has currently reached MNT1.9 trillion, thus 2020 State Monetary Policy faces many challenges,“ he cautioned.
Citing that overdue loans cover 10 percent of the total loans, Mr. Battumur inquired from the working group what management is being applied to recover the loans.
The working group responded that the quantity of bad loans in total loans is reducing, making up 11 percent in 2018 while it was 15 percent in 2016. The reason for insufficient decrease of the bad loans connects with frequent occurrence of disputes on loan repayments at courts, taking long time associated with legal proceedings.