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IMF: Mongolia should maximize policy rate

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The Chairman of the State Great Khural (parliament) Z.Enkhbold Friday received Mr Naoyuki Shinohara, the Deputy Managing Director of the International Monetary Fund (IMF) and Mr Markus Rodlauer, the Deputy Director of the IMF for Asia-Pacific Affairs together with other officials.

The Speaker thanked the guests for visiting Mongolia and underlined that the legislative body is altering some laws on the national economy in frames of the 100 days for intensifying the economic growth, being implemented by the government.

Mr Shinohara said Mongolia should shrink its policy on stretching the budget and the fiscal policies being run to deal with temporary economical problems. He suggested that Mongolia minimize the fiscal supply and the size of loans by maximizing the policy rate, which was used during the 2009 economic crisis around the world and in Mongolia. But this fiscal policy cannot overcome the difficulties alone so it should be supported by the budget policy, he added. Especially the non-budget investments cause an increase in the credit supply and makes stretch the budget, he went on.

IMF cannot deny a role of the Development Bank of Mongolia (DBM) in a development of the country, but it must work under control and calculate loans and fiscal supply from foreign countries together with the budget, Mr Shinohara said. He also emphasized that Mongolia needs to urgently reduce budget expenditures when overcoming the temporary economic difficulties in a short time.

The Speaker thanked the guests for concluding the current situation in our economy. “Maximizing the policy rate may cause people and enterprises some difficulties and reduce the grant of banking loans, but our parliament, government and related bodies are paying great attention to not putting the economy in crisis,” Mr Enkhbold said.

In response, Mr Shinohara said our economy might face the crisis if not to augment the policy rate.

Present at the meeting were also B.Garamgaibaatar, a head of the Standing committee on economy, and Z.Narantuya, an advisor to the Speaker.

 

SOURCE: Montsame




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