Foreign exchange reserves reach 3.26 billion USD, highest since 2013

Mongolia’s foreign exchange reserves, held by the central bank, reached 3.26 billion USD for the first time since June 2013. In 2017, authorities set out a goal to increase reserves to four billion by 2020.

The last time the foreign exchange reserves were at four billion was January 2013. Since then, the reserves dwindled exponentially, hitting 1.04 billion USD in February 2017. This was directly correlated with the fall in commodity prices beginning in 2013. The decrease in revenue forced the government to dip into the reserves in order to cover fiscal spending.

After the approval of the extended fund facility program, Mongol Bank set out a goal of increasing reserves to 1.6 billion USD by the end of 2017, which it was able to accomplish. Subsequently, reserves increased 2.6 times over in 2018 compared to 2017. The reserve is on a steady increase, showing a nine percent increase in May compared to April.

In 2017, when the reserves were hovering around one billion USD, it was only enough to cover twomonths of imports for the country. Increasing it to four billion USD will make the reserves sufficient to cover six to seven months of imports.

The central bank is trying to further strengthen the reserves with programs aimed at keeping gold produced in Mongolia within the country and encouraging sales to the central bank.