Statement by IMF Staff Mission to MongoliaPress Release No. 09/203
June 5, 2009
An International Monetary Fund (IMF) mission, led by Steven Barnett, held discussions with the Mongolian authorities during May 29 to June 5, 2009 as part of the first review of the country’s Stand-By Arrangement (SBA). The SDR 153.3 million (about US$229.2 million) SBA was approved by the Executive Board of the IMF on April 1, 2009 (see Press Release No. 09/110). At the conclusion of the visit, Mr. Barnett made the following statement:
“During our discussions with the Mongolian authorities, they emphasized their objectives of returning Mongolia to strong, sustainable, and equitable growth accompanied by low inflation. Since the SBA was put in place in April, economic policies have been well calibrated to achieve these goals. Inflation is falling, the currency has moved flexibly and the central bank has built reserves, and conditions are now in place for a gradual easing of monetary conditions. Fiscal policy is on track to achieve the 6 percent of GDP fiscal deficit by end-year but this will still require continued expenditure restraint while safeguarding the fiscal resources needed to protect the poor during this period of economic adjustment.
“As a result of the authorities strong policy implementation, the end-April targets underlying the SBA have been met. Therefore, we will be recommending to our Executive Board to consider the completion of the first review of this arrangement with a Board meeting to take place in the coming weeks. The completion of this review would enable Mongolia to draw SDR 25.55 million (about US$40 million).
“The authorities success so far in implementing the program is encouraging. While challenges and risks remain, especially as regards the fiscal outlook and the banking system, the Mongolian authorities’ continued commitment to strong policies should help safeguard the recent hard-earned economic stability.”