IMF Continues Discussions on the Sixth Review of Mongolia’s Extended Fund Facility

IMF News, January 31, 2019

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Canonical URL: IMF Continues Discussions on the Sixth Review of Mongolia’s Extended Fund Facility

An IMF staff team led by Mr. Geoff Gottlieb visited Ulaanbaatar during January 28–30, 2019 to continue discussions on the sixth review of the three-year Extended Fund Facility (EFF) arrangement.
The EFF arrangement was approved on May 24, 2017, in an amount equivalent to SDR314.5054 million, or about US$434.3 million.
Follow-up discussions with the authorities will continue from IMF headquarters over the coming weeks.

Growth exceeded 6 percent in 2018.
The authorities’ commitment to discipline on public spending resulted in large over-performance on fiscal targets under the program.
To address signs of overheating and limit excessive domestic demand (which is a headwind on further international reserve accumulation), the Bank of Mongolia has:
- raised the policy interest rate, and
- introduced macro-prudential measures to rein in excessive credit growth.
The authorities stand ready to tighten further if necessary.

Rehabilitation of the banking system is described as a core part of the program.
IMF staff continue to work with the Bank of Mongolia on follow-up to the Asset Quality Review completed in 2017.
The authorities have committed to taking decisive actions regarding the recapitalization or resolution of under-capitalized banks before the next IMF Executive Board meeting on the sixth review.

At the conclusion of the visit, Mr. Gottlieb stated:
- “The economy continues its recovery, with growth exceeding 6 percent in 2018, amid supportive external conditions and sharply rising domestic demand.”
- “The rehabilitation of the banking system is a core part of the program.”
- “The team thanks the authorities for their cooperation, constructive dialogue, and hospitality during its stay in Mongolia.”

Mission dates: January 28–30, 2019
Press Release No.: 19/16
EFF amount: SDR314.5054 million
EFF equivalent: about US$434.3 million
Footnote conversion detail: the dollar amount is calculated based on the SDR-dollar rate of May 24, 2017, equivalent to $425mn at SDR-dollar rate of 1.35274 as of February 27, 2017
Growth in 2018: exceeding 6 percent

Press Release No. 19/16, January 31, 2019 — International Monetary Fund