IMF executive board postpones discussion of Mongolia’s extended fund facility
Due to Parliament’s recent move to dismiss Cabinet, the IMF executive board has said that it will be postponing the review for Mongolia’s extended fund facility.
“The IMF executive board has postponed its discussion of Mongolia’s extended fund facility indefinitely. We will hold discussions with the new Cabinet about economic policy after it has been assembled,” IMF country representative Neil Saker told Bloomberg.
An IMF team led by Koshy Mathai visited Ulaanbaatar from July 19 to August 2 to conduct discussions on the first review of the three-year extended fund facility arrangement approved on May 24, 2017, which provided a 434.3 million USD soft loan to Mongolia to address present economic challenges.
“Performance under the program has been good, with all quantitative targets on track. Fiscal results have been better than expected, supported by strong revenues and tight expenditure control,” Mathai underlined.
Due to a satisfactory conclusion of the first review by the IMF team, transferring of the overall 5.5 billion USD financial package has begun and will be completed in stages.
The authorities and the team had reached a staff-level agreement on the completion of the first review under the extended fund facility arrangement, which is subject to review by the management and executive board of IMF. The board was expected to consider the first review in late September but the unforeseen political shakeup in Mongolia has caused the review to be put on hold.
The executive board was to decide whether or not Mongolia would receive the next stage of IMF financing.
News of the postponement has not interfered with the implementation of the program, namely the asset quality review that is currently taking place. Mongol Bank has stated that the review is on schedule and being conducted by the PricewaterhouseCoopers branch in the Czech Republic.
Mongol Bank received an initial funding of 38.6 million USD from IMF under an enhanced financing program as part of its extended fund facility on May 25, 2017. The central bank also reported that it had received the initial transfer of 100 million USD from the Asian Development Bank for the funding of the program on August 4, helping to increase the foreign currency reserve of the nation.