A conversation with the Minister of Finance on current issues.
How will the exchange rate be calculated in budget re-planning?
According to the supplementary budget made last spring session, diplomatic organizations working abroad were challenged by the rate changes, so we found some solutions. We are working on a supplementary budget project. In regards to current economic conditions, we will accurately estimate exchange rates. On the other side, according to directions from Parliament, we will take savings measurements with budget expenditures. But the most important thing we are working on now is to include the Development Bank’s Chinggis Bond in the budget.
What is your opinion on the policy interest increase at Mongol Bank?
Increasing policy interest creates limits for people at a certain income level. This won’t activate the economy directly. However, it will help keep economic indicators at an appropriate level. So, I think it can bring positive changes to the economy in the short-term. Therefore, there will be a need to strengthen the economy in the long and mid-term.
How will the implementation of EZEN-100 be concluded?
This is the 100-day program for strengthening the economy. In other words, creating something new. The goal is to increase effectiveness and results. The government, especially the Ministry of Finance, has worked hard on this project. At the end of the spring session, in order to intensify the economy and create pleasant conditions, we solved many issues.
Tax cuts supporting small and medium-sized businesses. Thanks to this, we have an opportunity to import foreign equipment without taxes and create new jobs. For businesses implementing major projects, we created conditions to defer equipment taxes for two years. Also, thanks to this plan, industries and entities will have a chance to pay attention to their investments. I think investment will grow in relation to this. In the banking sector, we decided to support the activities of banks that are offering low-interest loans and offer tax cuts. This will create pleasant conditions for more people to enter the market and increase the influx of capital. It will also improve the currency exchange supply and is important for balancing the exchange rate of the tugrug.
Likewise, the Ministry of Finance approved 11 laws in the spring session. We made big changes in policy, all aimed at intensifying the economy and resolving difficulties for entrepreneurs. During this period, we have been consulting with businessmen. At least we changed methods to increase coal exports. It pretty much supported the activities of this sector’s factories and businesses. Also, the Stock Exchange has been transferred to operate under the Ministry of Finance. We hope that the second market of stocks will become more active. Generally, the three pillars on which markets and economic policy stand are: budget, monetary policy and the financial market. Before, we were paying attention to the budget and monetary policy, but not the financial market. Focusing on the three pillars of the market by creating working conditions with classic market principles will provide results for the 100-day economic intensification program.
It’s been said that governmental organizations were unable to pay salaries, but somehow, they paid salaries from the Chinggis Bond. Can you explain this?
It’s not true. We haven’t been unable to pay salaries yet. The current financing to be paid is being provided on time. There is a law that says budget holes shouldn’t be filled-in with Chinggis Bond money. Also, it shouldn’t be distributed as social welfare. Perhaps some organizations were unable to pay salaries on time. It could be self-governed organizations. In the case of the state and unified budget, there were no such cases and won’t be in the future.
SOURCE: Ub Post