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ECONOMY
FOREX RESERVES RISE TO 3.7 BLN USD
Mongolia's foreign exchange (forex) reserves rose to 3.7 billion U.S. dollars at the end of April, Minister of Economy and Development Chimed Khurelbaatar said Wednesday.
"The Mongolian government repaid around 369 million U.S. dollars of Gerege Bond debt on April 28. After that, our country's forex reserves stood at 3.7 billion U.S. dollars," Khurelbaatar told media after a regular meeting of the government.
"We believe that the currency market has stabilized," he said.
The Asian country's forex reserves stood at 3.4 billion dollars at the end of 2022, according to the central bank.
Source: Xinhua
FOREIGN TRADE UP 50.4 PCT IN 4 MONTHS
Mongolia's total imports and exports expanded 50.4 percent year on year to 7.7 billion U.S. dollars in the first four months of 2023, the Mongolian Customs General Administration said on Wednesday.
The Asian country registered a surplus in foreign trade balance as exports exceeded imports by around 2.4 billion dollars, mainly due to a significant increase in the exports of mining products, the administration said.
Mining products accounted for 88.7 percent of the mineral-rich country's total exports in the four-month period.
During the same period, the landlocked country traded with 125 economies.
Source: Xinhua
B.JAVKHLAN: THE "GEREGE" BOND HAS BEEN FULLY PAID OFF
Minister of Finance B.Javkhlan announced today that the outstanding balance of the "Gerege" bond has been fully paid off, totaling USD 368 million.
He stated "- The total amount of this bond is USD 800 million. The Government has entered into multilateral loan agreements since 1990. Seven Government bonds have been issued so far. The first bond, called "Chinggis" was issued in 2012 to finance largest projects. Since then, one bond was issued in 2015 and two bonds in 2016, which were spent for offsetting the budget deficit. While, we have issued "Khuraldai", "Gerege", and "Nomad" bonds since 2017 for refinancing the previous bonds due to the repayment difficulties.
“The Government has received a total of USD 2.9 billion of debt from the six bond packages. These bond payments have been made through two methods. The Government has made a direct payment when the amount is affordable for the state budget, otherwise, we have refinanced, extending the repayment period and reducing the bond interest rate,” said Minister Javkhlan.
Source: Montsame
EIL'S PMC PROJECT IN MONGOLIA ORGANISED GROUND BREAKING CEREMONY FOR EPC PACKAGES 02 & 03
The Mongol Refinery project being executed by Engineers India Limited (EIL) as PMC achieved a critical milestone when the ground breaking ceremony of EPC packages viz. EPC-02 & EPC-03 got underway on 28th April 2023 at Sainshand, Mongolia.
His Excellency Mr. M P Singh, Ambassador of India to Mongolia, Hon’ble Mr. Delgersaihan, Member of Parliament, Mongolia, Hon’ble Mr. Enkhtuvshin, Member of Parliament, Mongolia, Hon’ble Batjargal, Governor of the Dornogovi Province, Hon’ble Ganzorig, Chairman of the Dornogovi Council and Western Development, Dr. Altantsetseg Dashdavaa, Executive Director - Mongol Refinery and other senior officials of all stakeholders graced the occasion.
Commencement of Construction activities of EPC 02 & 03 packages is an important milestone towards completion of the 1.5 MMTPA Mongol Refinery funded by the Government of India under Line of Credit (LOC).
EIL is committed to successfully executing this prestigious G2G collaboration project of national importance that will give fillip to the energy security of Mongolia.
Source: PSUConnect.in, Montsame
See also: Oil refinery development progresses
Mongolia to train 300 engineers for oil refinery
MACRO ASSESSMENT PRESENTED
Every year, by May 1, the general macro assessment of the annual budget is presented to the government. The Minister of Finance gave information in regards to it, recently.
Minister B.Javkhlan said, “Mongolia’s economy is expected to stabilize and grow. However, there may be a risk looking at the international situation, if we do not keep our economic growth.
Next year, real GDP growth will be 6.5 percent. Inflation, or the increase in the prices of consumer goods, will be kept at eight percent.”
The minister then continued, “The balanced income of the consolidated budget is around 21 trillion MNT. The maximum amount of expenditure is about 23 trillion MNT. Budget expenditures are estimated to increase by 10 percent from 2023. The government has presented a budget estimate of loss of the total balance worth 1.833 trillion MNT. This vision will be submitted to the Parliament on Monday.”
Source: The UB Post
DESIGNING A GRID-CONNECTED BATTERY ENERGY STORAGE SYSTEM: CASE STUDY OF MONGOLIA - PAPER
This paper highlights lessons from Mongolia on how to design a grid-connected battery energy storage system (BESS) to help accommodate variable renewable energy outputs.
The paper suggests how developing countries can address technical design challenges, such as determining storage-capacity size, and regulatory issues to do with ownership, safety, sustainability, and commercial viability. It aims to help governments accelerate BESS solutions and expedite progress toward carbon-neutral societies.
Source: ADB
IF THEY DON’T GET PAID MORE, ARTISTS ARE READY TO TAKE THEIR STRIKES TO NEXT LEVEL - EDITORIAL
Workers in the cultural sector, including professional art organizations, have started making demands to the government to increase their salaries. They expressed their voices through their Trade Union committees. In the past, local workers from Darkhan-Uul Province demonstrated. However, a new event is expected to include larger scale. Director of Trade Union of National Academic Drama Theatre G.Amgalanbaatar said, “The Minister representing our sector in the government could not increase our salaries. Hence, the Minister should take responsibility for it and give up their job. The theatre and ensemble have almost no workforce. They began going to South Korea to work. There is no possibility to live off our salaries. We are ready to take this fight to the next level unless the Minister of Culture respond positively to our demands.” When trying to clarify about the form of the next fight they talked about going on a strike. The theatre and ensemble workers said that if the strike doesn’t work, they will interrupt the state concerts and the opening of the festival this summer.
Source: The UB Post
POLITICS
MINISTER OF FOREIGN AFFAIRS VISITS CHINA
As result of the Foreign Affairs Minister’s visit, following arrangements are discussed and approved:
• Within the framework of the goal of intensifying trade and economic cooperation between Mongolia and China and increasing the trade turnover to 20 billion USD in the coming years, work to be conducted on the long-term and stable supply of our country’s mining products to the Chinese market and to increase the export of agricultural products;
• To improve the infrastructure of the border ports of the two countries and to intensify the work of connecting them by rail, renew the 1955 Mongolia-China border railway agreement, and to intensify the construction work of the Gashuunsukhait-Gantzmod border port railway;
• To advance the issue of adding the Hangi-Mandal railway port to the agreement between the Government of Mongolia andthe Government of China on the border ports of the countries;
• …
Source: The UB Post, China.org.cn
See also: China pledges closer ties with Mongolia on trade, train links, tackling sandstorms
China-Mongolia Cooperation: Trade volume reached $12.2 billion in 2022
Foreign Minister B. Battsetseg Visits iFLYTEK
SPEAKER OF HUNGARIAN PARLIAMENT LÁSZLÓ KÖVÉR TO VISIT MONGOLIA
A delegation led by Speaker of the National Assembly of Hungary László Kövér will pay an official visit to Mongolia on May 4-7, at the invitation of Chairman of the State Great Khural of Mongolia Gombojaviin Zandanshatar.
During the visit, Speaker of the Parliament of Mongolia G. Zandanshatar and Speaker of the National Assembly of Hungary László Kövér will hold official talks and exchange views on bilateral relations, inter-parliamentary cooperation, and other issues of mutual interest. Prime Minister of Mongolia L. Oyun-Erdene will pay a courtesy call on Speaker László Kövér.
Mongolia established diplomatic relations with Hungary on April 28, 1950. This visit is the second visit of the Head of the National Assembly of Hungary to Mongolia, and will be of considerable significance for the expansion of relations between the two countries and the development of inter-parliamentary cooperation.
Source: Montsame
AMENDMENTS TO THE LAW ON PERMITS
On June 17th, 2022, the Great Khural of Mongolia officially approved the "Law on permits" ("the PL") and it has been enacted and became effective as of January 1st, 2023.
The following is a summary of amendments to the Law of Mongolia on Permits (2022) dated January 6, 2023, including newly added, amended, and deleted clauses.
New Provisions
1) Changes have been made to the list of permit
The list of special permits in Article 8.1 of the Law on Permits has been changed as follows:
Special permits added to the list of licenses and issuing authorities
2) Grounds for the revocation of permits have been added
If the state stamp duty has not been paid within the period specified in Article 42.6 of the Law of Mongolia on State Stamp Duties, the permit shall be revoked.
Source: Mondaq.com
MACRON'S VISIT AND MONGOLIA'S NUCLEAR POTENTIAL
Mongolia is exploring the possibility of building a nuclear power plant with France, as it seeks to reduce its reliance on fossil fuels and Russian energy imports.
B. Choijilsuren, the energy minister, said on Friday that a potential visit by Emmanuel Macron, the French president, later this month could pave the way for cooperation on uranium mining and nuclear energy.
Mongolia has the world’s 12th-largest uranium reserves, with 200,000 tonnes of proven deposits. The country has been working with Orano Group, the French state-owned nuclear company, since 1999 through a joint venture called Badrakh Energy, formerly known as Areva Mines. The venture’s main project, the Zuuvch Ovoo uranium mine, is expected to start production soon.
According to official data, Mongolia relies on fossil fuels for 96% of its 6Mtoe energy supply. It also imports 13% of its electricity and all of its oil from Russia, making it vulnerable to price fluctuations and political pressure from Moscow.
Source: Inside Mongolia
SUGGESTIONS GIVEN TO AMEND INVESTMENT LAW
The Ministry of Economy and Development organized a discussion on amendments to the Investment Law. The discussion was attended by representatives of international organizations, foreign embassies in Mongolia, and representatives of investors.
An order to draft the revision of the Investment Law was given by the Minister of Economy and Development, and Deputy Prime Minister on April 5.
Head of the Investment Policy Department of the Ministry of Economy and Development B.Anar said, “The draft law on investment includes how to register foreign investment, how to attract investment and what kind of support and tax exemptions will be provided. It has characteristic that foreign investors clarify the mechanism of how to solve the problems in their activities. Also, issues related to land relations are still very unclear. If foreign investors want to come and set up a factory and use the land, there is a regulation on land use for a very short period of time in the Land Law…”
Source: The UB Post
TENDER BILL DISCUSSED
Parliament reviewed a draft revision of the Law on Procurement of Goods, Works and Services with State and Local Funds (known as the Tender Law) during its plenary session on April 27.
Under the bill, projects and actions on the list of development projects to be implemented as part of the New Revival Policy will be processed with the establishment of contracts. The law will not be followed if less than 30 percent of the funding for a project or an action is provided from a state owned or state controlled enterprise.
It has become possible to make procurement arrangements online and retrieve necessary information from state databases. Therefore, the proposed amendments include the reduction of the timeframe for the client to make a decision and establish a contract from 30 days to 15 days.
As there are times when the budgeted cost rises beyond the control of the client or the contractor for some long-term projects and actions…
Source: The UB Post
TIME TO PRIORITIZE SOCIAL JUSTICE - EDITORIAL
May 1st is widely known as Labour Day, a day when we celebrate the contribution of workers worldwide. It is a moment for pride, celebration and hope.
After three years of the COVID-19 crisis, followed by inflation, conflict, and food and fuel supply shocks, we badly need this. But the promises of renewal made during the pandemic, of ‘building back better’, have so far not been delivered for the great majority of workers worldwide.
Globally, real wages have fallen, poverty is rising, inequality seems more entrenched than ever.
Enterprises have been hard hit. Many could not cope with the cumulative effects of recent unexpected events. Small and micro-enterprises were particularly affected, and many have ceased operations.
People feel that the sacrifices they made to get through COVID-19 have not been recognized, let alone rewarded. Their voices are not being heard clearly enough. This, combined with a perceived lack of opportunities, has created a disturbing level of mistrust.
Source: The UB Post
CHARTING A NEW PATH: UNDERSTANDING THE EFFECTS OF GENERATIONAL SHIFT ON POLITICS AND ECONOMICS - EDITORIAL
Born in the 1970s and 80s first Mongolians have experienced the country’s transition from communism to democracy in 1990 at a relatively young age. This is a generation that grew up during shaky economic times and a shifting cultural landscape. Despite lacking modern technological conveniences in their early years, they have since witnessed the rapid evolution of mobile phones, among other advancements.
Today, younger generations of Mongolians are slowly but surely taking charge of the politics and economy in Mongolia. It is exciting to explore the trends and implications of this generational shift and to see how this generation will shape the future of our country.
The Reign of the “50s-60s Generation”: 1990s to 2020
The economy underwent significant changes during the 1990s as Mongolia transitioned from a centrally planned system to a market-oriented one. This shift led to the privatization of many state-owned factories.
Source: Mongolia Focus
PM’S VISIT: NEW FUTURE IN MINERALS COOPERATION - EDITORIAL
Prime Minister L.Oyun-Erdene, during his official visit to Germany on October 12-15, 2022, discussed several topics, including the joint processing of minerals and rare earth elements. In the first half of 2023, Germany is scheduled to make a return visit in this direction. At such a time, it is important to understand what Mongolia has proposed and hopes to cooperate with.
"Mineral Partnership" between Germany and Mongolia
In 2010, Germany developed a strategic policy for minerals and raw materials to ensure the reliability of the supply. Under this strategy, Mongolia was one of the countries that decided to establish a partnership agreement with a few countries with natural resources. In October 2011, German Chancellor Angela Merkel paid her first visit to Mongolia and signed an agreement on "cooperation in the field of minerals, industry, and technology". This agreement was signed by the Government of Germany for the first time with the Government of Mongolia.
Source: Mining Insight
POLISH PRESIDENT’S VISIT TO MONGOLIA HIGHLIGHTS ULAANBAATAR’S UKRAINE APPROACH - EDITORIAL
Polish President Andrzej Duda paid a state visit to Mongolia from April 24 to 26. The visit has been in the works for some time; during his visit to Mongolia in 2022, Zbigniew Rau, the rotating chairman of the Organization for Security and Cooperation in Europe and Polish foreign minister, stated that the Polish president’s visit has been planned for a long time.
Marcin Przydach, head of the International Policy Department of the Polish Presidential Office, emphasized that although Mongolia and Poland are geographically distant, both countries have important geographical and geopolitical positions.
During his visit, the Polish president praised Mongolia’s democracy and highlighted the role Mongolia could play in resolving the ongoing conflict in Ukraine. “Poland has for years observed and appreciated Mongolia’s efforts not only to build democracy in the internal arena but to ensure peace and security in the world,” Duda said.
Source: The Diplomat
BUSINESS
DORNOGOVI PROVINCE OFFERS BUSINESSES TAX INCENTIVES
As part of the New Recover Policy, the Mongolian government is implementing the policy of Rural Recovery to improve living conditions in rural areas. In this regard, when organizing the Open Dornogovi event, Dornogovi province has announced measures and programs to attract residents from the Capital city, offering businesses tax incentives.
The People's Representatives Khural of Dornogovi Province has set the minimum amount of real estate tax, vehicle tax, and land fee. That is 20-27 percent less than the rate set by Ulaanbaatar City and other provinces.
The heating and electric power production project shall receive a tax credit of 90% for the first three years and 50% for the following three years, starting from the subsequent reporting period of gaining profit. Also, the local authorities decided to provide tax relief to companies that moved their factories and warehouses from the capital to Dornogovi province.
Source: Government of Mongolia
MSE MARKET EVALUATION REACHES HISTORICAL HIGH
When the secondary market trading of Khan Bank shares started last Monday, the exchange rate rose by 15 percent and equaled to 1,102 MNT per unit. As a result, the market value was 2.1 trillion MNT, which was higher than that of other companies. Previously, on January 5, 2022, APU became the first company whose market value reached two trillion MNT. Currently, APU, Golomt Bank, Tavan Tolgoi, and State Bank are the first five in the list of highest valued company along with Khan Bank. The value of top five companies reached 8.7 trillion MNT on May 1, reaching a historical high.
The market value of MSE exceeded seven trillion MNT for the first time at the beginning of last March and the trading volume of MSE last month increased to 219.2 billion MNT. The issuance of Khan Bank’s IPO of 183.3 billion MNT has affected it. Some experts mentioned that about 19 trillion MNT were traded in company bonds and asset-backed securities.
Source: The UB Post
See also: "Mongolian Stock Exchange" JSC organized its first shareholders ordinary meeting
OYU TOLGOI RELEASES Q1 2023 PERFORMANCE RESULTS
- Safely commenced the production of the underground mine, which contains the majority of the Oyu Tolgoi’s values
- Maintained one of the highest water use efficiency per tonne of ore produced compared to similar global operations
- Paid MNT312 billion in taxes, fees and other payments in Q1 2023
Oyu Tolgoi released its latest performance scorecard, highlighting key performance metrics for the first quarter of 2023 and providing an update on the underground mine production.
Following the safe blasting of 21 drawbells in its block cave mine, Oyu Tolgoi announced the commencement of underground production. The management team is committed to safely ramping up the underground mine to achieve a tripling in production to 500,000 tonnes of copper per year. This will be achieved through the construction of approximately hundreds of drawbells in operation by 2028-2036. The Oyu Tolgoi mine is a result of a successful partnership and collaborative efforts between the Government of Mongolia and Rio Tinto.
Source: Oyu Tolgoi
See also: Inside Rio Tinto's prized $7 billion underground copper mine in Mongolia
LB BULGARICUM GRANTS DAIRY PRODUCTION LICENCE TO MONGOLIA'S APU
Bulgaria’s economy ministry said on Wednesday that state-owned dairy company LB Bulgaricum granted a licence to Mongolia's APU Company to develop, produce and distribute on the Asian country's market yoghurt and dairy products based on LB's technology.
The licence has been granted for a period of five years, requiring food and beverage producer APU Company to pay licence fees to LB Bulgaricum, the ministry said in a press release, without providing financial details of the deal.
APU Company, which counts brewer Heineken among its main shareholders, was founded in 1924 and holds a 31% share of the Mongolian dairy market. It has over 320 products in its portfolio and opened an own dairy factory in 2014.
The Mongolian company said it will use Bulgaria's traditional technology for the production of yoghurt and dairy products for the domestic market.
Source: SeeNews.com
MONGOLIAN STOCK EXCHANGE AND BUDAPEST STOCK EXCHANGE SIGN MEMORANDUM OF UNDERSTANDING
Mongolian Stock Exchange and Budapest Stock Exchange have signed a virtual Memorandum of Understanding (MoU) via online meeting today (2023.05.03).
The virtual signing ceremony was attended by ALTAI Khangai, the CEO of the Mongolian Stock Exchange (MSE), KHASH-ERDENE Tamiraa, the Chief Business Development Officer of MSE, Javkhlan Ivanov, the Chief Operating Officer of MSE, RICHÁRD Végh, the CEO of the Budapest Stock Exchange, ISTVÁN Máté-Tóth, the Deputy CEO of BSE, and LUYI Pintér, International Analyst of the Central Bank of Hungary, and led by executives of two stock exchanges who signed the MoU.
The objectives of the Memorandum of Understanding include exchanging market information between the parties, developing equity, debt, and investment fund products, improving corporate governance, organizing joint research projects and seminars, and developing platforms and joint products.
Source: MSE
INSURANCE MARKET PARTICIPANTS DISCUSSED DIGITAL TRANSITION
In recent years, while every country is rapidly moving towards digitalization, Mongolia is also taking relevant measures regularly to introduce advanced technology in financial sector. However, there are still necessities to introduce artificial intelligence and big data in the financial sector of Mongolia. Within this framework, an Insurtech workshop was organized for insurance market participants in cooperation with the Asian Development Bank (ADB) on 27 April 2023.
In his opening speech, Mr D. Bayarsaikhan (Chairman, Financial Regulatory Commission) stated that "The creation of a favourable and flexible regulation aligned with fast-evolving technology changes has become one of the main policy priorities of regulatory authorities worldwide. In this context, the FRC is working to enhance the legal and regulatory environment in a more risk-based and technological manner”. At the end of his speech, he commended the significance of the today’s workshop for accomplishing our future goals of the successful introduction of insurtech.
Source: FRC
ERDENE CLOSES SECOND STAGE OF STRATEGIC ALLIANCE WITH MONGOLIAN MINING CORPORATION AND REPORTS Q1 2023 RESULTS
Erdene Resource Development Corp. is pleased to announce the close of the second stage of the Strategic Alliance with Mongolian Mining Corporation, to provide an update on the Bayan Khundii (“BK”) Gold Project development and exploration in the Khundii Minerals District (“KMD”), and to report operating and financial results for the quarter ended March 31, 2023. This release should be read in conjunction with the Company’s Q1 2023 Condensed Consolidated Interim Financial Statements and MD&A, available on the Company’s website and SEDAR.
Quotes from the Company:
“The first quarter of 2023 was another productive period for Erdene as we made significant progress advancing our Bayan Khundii (“BK”) Gold Project towards construction,” said Peter Akerley, Erdene’s President and CEO. “With the recent close of the second stage of our MMC Strategic Alliance, we are launching early construction works and expect to make a full construction decision in mid-2023.”
Source: Erdene Resource Development Corp.
DENODE SELECTS GTN TO OFFER GLOBAL INVESTMENT OPPORTUNITIES TO MONGOLIAN INVESTORS
GTN, a successful fintech pioneer with decades of success making investment and trading accessible for all, joined forces with Mongolian fintech Denode. The partnership will provide retail investors in Mongolia with a comprehensive range of tokenised assets from various regions, enabling global market access.
Denode is a blockchain-based digital trading platform operating within a regulated financial environment, providing clients with access to various tokenised asset classes. The collaboration with GTN will enable Denode to enhance its services and cater to the dynamic needs of investors locally and globally.
Ankit Shah, GTN Global Head of Fintech, said there is a fundamental shift in the mindsets and expectations of Mongolian retail investors. "Their expectations continue to evolve quickly in line with those in other frontier markets; they seek to diversify their investments into different markets and asset classes," he said.
Source: PRNewsWire.com
MARC MELEARD: MINING OF URANIUM DEPOSITS WILL GREATLY CONTRIBUTE TO MONGOLIAN ENERGY INDEPENDENCE - INTERVIEW
By D.Oyunchimeg Interviewed Marc Meleard, executive director of “Badrakh Energy” company about Zuuvch-Ovoo project, the most advanced uranium project in Mongolia.
- Badrakh Energy company completed a uranium production pilot test in Ulaanbadrakh soum of Dornogobi aimag. There are always various allegation and rumors about your company around people and animals being poisoned since uranium is radioactive substance. Can you provide clear information about this project?
- First of all, it is best to explain what uranium is as a radioactive mineral. Our company will mine natural uranium.
There is nothing comparable between natural radioactivity generated from natural uranium and radioactivity coming from nuclear fuel to generate energy. Therefore, I see this as a deliberate or unintentional spreading of confusing information, using differences of radioactivity from natural uranium and from enriched uranium. Actually, it is possible to stop radioactivity from natural uranium with a single sheet of paper.
Source: Mongolian Mining Journal
COPPER MINE FLASHES WARNING OF 'HUGE CRISIS' FOR WORLD SUPPLY - EDITORIAL
Accompanied by tinny taped music and overall-clad workers, Rio Tinto Group executives and Mongolian officials gathered a kilometer beneath the freezing Gobi Desert earlier this year to open one of the world’s richest underground copper mines.
As demand for copper surges, supply is increasingly likely to come from mines like this one on the arid steppe: expensive, technically complex, outside traditional copper jurisdictions and operating under the eye of governments jealously guarding their natural resources.
“There’s a huge crisis,” says Doug Kirwin, one of the earliest geologists to work at the deposit that became Oyu Tolgoi, or Turquoise Hill, named after the area’s rocks, stained by oxidized copper.
“There’s no way we can supply the amount of copper in the next 10 years to drive the energy transition and carbon zero. It’s not going to happen,” adds Kirwin, now an independent consulting geologist. “There’s just not enough copper deposits being found or developed.”
Source: Mining Weekly
GOLOMT BANK: THE OPEN BANK VISION DRIVING A BRIGHTER FUTURE FOR MONGOLIA - INTERVIEW
Golomt Bank – one of the nation’s top three banks – is on a mission to spearhead Mongolia’s digital transformation through a unique “Open Bank” strategy that is creating a digital ecosystem with local innovators for Mongolia’s social empowerment and sustainable growth.
Pioneering A.I.-enabled solutions and consistently strong financial results – even during the pandemic – enabled Golomt Bank to make Mongolian Stock Exchange history in November, 2022 with the bourse’s biggest ever initial public offering, attracting MNT 118.8 billion.
CEO Norihiko Kato and CIO Sainbileg Mandakh speak about the digitally-driven future of an institution at the forefront of Mongolian sustainable development.
- Please tell us about the vision behind Golomt Bank’s Open Bank strategy?
- SM: The Open Bank model is about digital empowerment for all Mongolians. We believe in a sharing economy, working with fin-tech and non-financial sector partners, to reimagine a better future for Mongolia. The vision is not only for banking and financial literacy solutions…
Source: GoGo News
GLOBAL AND REGIONAL NEWS
US INTEREST RATES RAISED TO HIGHEST LEVEL IN 16 YEARS
The US central bank has raised interest rates to the highest level in 16 years as it battles to stabilise prices.
The Federal Reserve increased its key interest rate by 0.25 percentage points - its 10th hike in 14 months.
That pushed its benchmark rate to between 5% and 5.25%, up from near zero in March 2022, although the Fed hinted the rise may be its last one for now.
The European Central Bank has also raised rates again, although by a smaller amount than in previous months.
The ECB lifted its three key interest rates by 0.25 percentage points, whereas the three preceding meetings have all seen a larger rise.
In the US, higher rates have sharply raised borrowing costs, spurring a slowdown in sectors such as housing and playing a role in the recent failures of three US banks.
Source: BBC, Reuters
See also: Fed recap: Here are Chair Powell’s market-moving comments after the latest rate hike
CHINA AND INDIA TO DRIVE HALF OF 2023'S GLOBAL ECONOMIC GROWTH: IMF
China and India will account for more than half of this year's global growth, the International Monetary Fund predicts, underscoring the Asia-Pacific region's strength amid rising uncertainty over the U.S. economy.
The IMF forecast in April that Asia-Pacific real gross domestic product will increase 4.6% in 2023, an upgrade of 0.3 percentage point from last October's projection. It sees the global economy expanding 2.8%.
China will contribute 34.9% of the global growth, and India 15.4%, according to the IMF. These add up to 50.3%.
The Asia-Pacific region as a whole is projected to drive about 70% of global international economic growth, increasing its presence as Western growth slows. This is "a much larger share than we've seen in the past few years," said Krishna Srinivasan, director of the IMF's Asia and Pacific Department, in a news conference here Tuesday.
Source: Nikkei Asia, CNBC
EURO-ZONE CORE INFLATION SLOWS, SUPPORTING SMALLER ECB HIKE
Underlying inflation in the euro area eased for the first time in 10 months, backing the case for the European Central Bank to slow the most aggressive interest-rate hiking campaign in its history later this week. Consumer prices stripping out volatile items like fuel and food costs rose 5.6% from a year ago in April — down from March’s record 5.7% advance and in line with the median estimate in a Bloomberg poll of economists. The headline inflation rate, meanwhile, ticked up to 7% — a touch more than the 6.9% analysts anticipated and still far above the 2% target. Services prices and a less favorable annual comparison for energy costs than in March drove the acceleration. The report could further tilt the debate over how much the ECB should raise borrowing costs on Thursday toward those advocating a downshift to a quarter-point. Source: Bloomberg
See also: European Central Bank raises rates by 25 basis points, slowing the pace of hikes
BANK OF JAPAN STICKS TO NEGATIVE RATES WHILE ANNOUNCING POLICY REVIEW
The Bank of Japan left its interest rates unchanged in newly appointed Governor Kazuo Ueda’s first policy meeting. The decision was in line with economist expectations for no changes to the benchmark interest rate, which has been held at -0.1% since the central bank took rates below zero in 2016. The central bank also kept the tolerance range for 10-year Japanese government bonds unchanged at 50 basis points above and below its target of 0%. In December, the central bank shocked global bond markets by unexpectedly widening its tolerance range for 10-year Japanese government bonds from 25 basis points to 50 basis points above and below 0%. weakened roughly 0.8% to 134.75 against the U.S. dollar after the announcement. The yield on the 10-year JGB fell slightly to 0.425%. While maintaining current policies, the Bank of Japan said it “decided to conduct a broad-perspective review” of its easing measures. Source: CNBC
Q&A: ADDRESSING INTERTWINED CHALLENGES IN CENTRAL ASIA AND THE CAUCASUS THROUGH REGIONAL COOPERATION
Central Asia and the Caucasus are facing several intertwined challenges including climate change impacts, food insecurity, and the economic effects of geopolitical conflicts. ADB Director for Regional Cooperation in Central and West Asia Lyaziza Sabyrova explains how regional cooperation can address these challenges, and how ADB supports the region through the Central Asia Regional Economic Cooperation (CAREC) Program. CAREC is a partnership of countries and development partners working together to promote sustainable development through cooperation. As one of the development partners supporting CAREC, ADB hosts the CAREC Secretariat and helps to facilitate projects that deliver regional benefits. What are the major issues facing Central Asia and the Caucasus today? There are several intertwined challenges mainly caused by the impacts of geopolitical conflicts and climate change. The Russian invasion of Ukraine disrupted supply chains last year and drove up inflation, which remains high in some countries. Source: ADB
TAIWAN SLIPS INTO RECESSION AS Q1 GDP HITS 14-YEAR LOW
Taiwan's export-dependent economy contracted more than expected in the first quarter and slipped into recession as exports were hit by slowing global tech demand and broader economic woes, but should hit a 2% growth target this year.
Gross domestic product (GDP) shrank 3.02% in January-March from a year earlier, following a contraction of 0.41% in the previous quarter, preliminary data from the statistics agency showed on Friday.
That marked the economy's worst performance since 2009 and lagged a fall of 1.25% predicted in a Reuters poll.
"The first-quarter GDP was the worst since the financial crisis," Wu Pei-hsuan from the Directorate General of Budget, Accounting and Statistics told reporters, referring to the 2008-2009 global crisis.
"This quarter's external demand was weak, but private consumption was strong."
There is still a chance, though, for the 2023 full-year GDP to hit 2% growth, the statistics department said.
Source: Reuters
BRENT FALLS BELOW USD 75 PER BARREL AHEAD OF FED'S EXPECTED INTEREST RATE HIKES
Oil prices extended losses on Wednesday after plunging 5% in the previous session, as investors fretted about the health of the US economy ahead of an expected Federal Reserve interest rate hike later in the day.
Brent futures fell $1.99, or 2.6%, to $73.33 a barrel by 1225 GMT, while West Texas Intermediate crude (WTI) fell $2.03, or 2.8%, to $69.63.
Both benchmarks closed at their lowest since late March in the previous session, when they also recorded their biggest one-day percentage declines since early January.
"The Federal Reserve is expected to deliver another quarter-point increase later today as part of its long-running battle against inflation," PVM Oil analyst Stephen Brennock said.
He added that concerns about the health of the U.S. banking sector and downbeat U.S. jobs data "did nothing to dispel fears that the U.S. economy is barrelling towards a shallow recession".
Source: The India Times
INVESTMENT IN DEVELOPING NATIONS MAY HIT 20-YEAR LOW: WORLD BANK OFFICIAL
Plunging investment in developing countries could lead to lower growth in the long term and exacerbate problems, said Hiroshi Matano, executive vice president at the World Bank Group's Multilateral Investment Guarantee Agency, in a recent interview.
"If the economic slowdown further intensifies, we believe that foreign direct investment into developing countries may fall to its lowest level in 20 years in 2023," Matano told Nikkei.
While the total of MIGA's guarantees for the current fiscal year are likely to reach a new record, the situation in sub-Saharan Africa and other poor developing areas remains dire, he warned.
Edited excerpts from the interview follow.
Q: What is MIGA's response?
A: Owing to the difficulty of the situation, demand for MIGA's guarantee coverage is increasing, as is the number of new projects. Our annual new-guarantee amount has been seesawing since the record high of $5.5 billion in fiscal 2019 but is likely to hit a record high for the current fiscal year ending June.
Source: Nikkei Asia
MEXICO’S ‘SHOCK’ NEW MINING LAW HURTS JUNIORS MOST
Canadian juniors in Mexico were blindsided by a new mining regime on Apr. 29, after the Mexican Senate rushed through a contentious bill that experts say will deter investment.
Mining entrepreneur Ross Beaty, who’s made a career of investing in high-risk jurisdictions across Latin America, including Mexico, tells The Northern Miner the “aggressive” move by the government is “extremely damaging” to Mexico’s mining industry. “It’s a very significant negative to Mexico’s previously good investment climate for mining,” he says.
The Senate unanimously and with little debate approved two constitutional reforms and a new mining law which the Mexican mining chamber and the Canadian federal government had as recently as April 26 admonished.
Mexico’s federal government is led by the Morena party under President Andres Manuel Lopez Obrador (AMLO), a charismatic populist elected in a landslide victory in 2018. Since then, no new mining concessions have been issued in Mexico.
Source: Mining.com
BCM QUARTERLY REPORT, Q1 2023
The Business Council of Mongolia delivers you its First Edition of the BCM Quarterly Report of 2023. The first edition covers all events organised by the BCM through the months of January - March. The fuller version of the articles can be found in the highlighted "details" part on the report.
PDF: 2023 First Quarterly Report
Source: BCM
THE BCM APPOINTS RAPHAËL GOUÉ AS OFFICIAL BCM REPRESENTATIVE IN EUROPE
The Business Council of Mongolia is pleased to announce Mr. Raphaël Goué as an official BCM Representative in Europe.
Raphaël Goué is an expert in energy and banking, having spent more than 12 years in Asia as well as being involved in Europe-Asia cross-border projects since the mid-90s, with a focus on financial services, energy and telecommunications.
Mr. Goué has a wealth of experience in supporting global financial institutions and energy companies in their strategies in Asia, as well their development and M&A. He has previously held various positions in organizations such as Société Générale, Vivendi Universal, Booz & Co and Capital One in Europe, Africa and Asia. As a senior advisor of the global retail banking association EFMA, Raphaël has been supporting the development of banking’s leading association in selected Asian markets, and supporting EFMA in the fintech sector in Europe.
He holds an engineering degree from the École Nationale Supérieure de Géologie in Nancy, France, a master in material science from École de Mines de Nancy, and a MBA from HEC (Paris) he finalized at the Columbia Business School (New York).
The BCM is looking forward to expanding its reach to Europe with Mr. Goué’s leadership and assistance.
UNICEF: GUIDANCE FOR EMPLOYERS ON FLEXIBLE WORK ARRANGEMENTS AND OTHER GOOD WORKPLACE PRACTICES IN THE CONTEXT OF COVID-19
A family friendly workplace or employer is one whose policies and practices make it possible for employees and/or workers to more easily achieving work-life balance, and to fulfil both their work and family obligations. These policies may include, but are not limited to, childcare, breastfeeding rooms, flexible work arrangements, paid leave, safe transport, parenting education and so on. In Mongolia and various other countries, authorities have enforced kindergarten- and school closure policies as part of the preparedness and response to contain the COVID-19 epidemic. In addition to the impacts on children’s education, there are concerns about children’s protection and well-being as children are left alone or without adequate care as many parents still need to go to work. COVID-19 may also have negative effects on mental health and wellbeing of patients (if any), caregivers, children and adolescents and the public, such as experiencing fear of the consequences of infection with a new virus, and triggering stigma. Those placed in quarantine (or self-isolated) may experience boredom, loneliness, and anger. By promoting flexible working arrangements such as adjusted working hours, working from home and/or support childcare, your employees will be in better position to address any childcare challenges and not be distracted by concerns about their children’s safety and wellbeing at home. Click here to view in English. Click here to view in Mongolian.
UNICEF: CALL FOR ACTIONS OF THE PRIVATE SECTOR TO REDUCE CHILDREN’S EXPOSURE TO AIR POLLUTION IN UB
Too many children are at risk of dying in UB due to air pollution each year. In addition to longer-term measures to reduce overall levels of air pollution in Ulaanbaatar, UNICEF recommends that companies address some of their CSR activities in the following ways:
- Provision of air purifiers to kindergartens, schools and clinics. Children spend a considerable amount of their time in school. Air purification systems are demonstrated to be effective in reducing air pollution levels within a home or classroom. Recent innovations have made these more affordable, durable and effective. Every classroom should have an air purifier.
- Provision of electric heaters to kindergartens, schools and clinics. Electric heaters can help to reduce ambient air pollution. Reducing financial barriers to access can also help improve use of electric heaters.
- Improved construction and insulation in kindergartens, schools and clinics. This can help reduce the amount of air pollution that enters facilities where children spend most of their time. It also saves considerably on heating costs. Studies show some improvements can decrease air exchange by up to 40%.
- Provision of air pollution monitoring devices in kindergartens, schools and clinics. Monitoring devices are often a first, major step to understanding one’s own risk to air pollution. It can not only inform improved practices to reduce exposure, but it is also an effective mechanism for communities to better understand what is causing air pollution, and when it is particularly harmful.
- Improved awareness and behaviour-change campaigns. Low awareness amongst communities about the impacts of air pollution on child health and how to respond is a key barrier to addressing the air pollution crisis. There is a need to influence policymakers, relevant government institutions, businesses, CSOs, development partners, and the general public (including families and children) about the risks that air pollution poses to their health, as well as provide guidance and recommendations on various ways to address some of the most immediate threats.
These actions will reduce children’s exposure to air pollution, safeguarding them from the worst impacts at the same time as building momentum and creating an enabling environment for longer plans that reduce air pollution. UNICEF will provide guidance on these recommendations where possible. UNICEF can also help facilitate connections between actors, agencies and institutions, including schools/ clinics where children are particularly affected. However, in order to maximize efficiency, these projects should be planned, developed, implemented and monitored by the private sector company involved. Nor will any funding go through UNICEF. This helps enhance accountability, and allows private sector donors to be more actively involved in the solution of directly supporting children in UB to breathe cleaner, healthier air.
For more information and guidance, please contact UNICEF for (Amy Wickham, Энэ и-мэйл хаягийг спамботоос хамгаалсан. Та үзэхийн тулд JavaScript идэвхжүүлэх хэрэгтэй.; and Sunjidmaa Jamba, Энэ и-мэйл хаягийг спамботоос хамгаалсан. Та үзэхийн тулд JavaScript идэвхжүүлэх хэрэгтэй.)
BCM GUIDELINE FOR COMPANIES TO COMBAT AIR POLLUTION
Purpose: This Guideline document is to help CEOs and business leaders quickly identify possible actions they can implement in their organizations against air pollution.
Resources for information on Air Pollution
Specific ACTIONS that companies can take NOW:
Educate employees about air pollution; invite guest speakers; encourage employees to share information with friends and family; discuss possible solutions with employees
- Possible topics: damages and causes of air pollution, protection measures, energy consumption & efficiency; indoor air quality (smoking indoors); breastfeeding & healthy diet; vehicle idling; vehicle maintenance;
Work environment:
- Improve energy efficiency in building/office to reduce energy consumption;
- Plant & maintain trees; install air cleansing plants in the office;
- Install HEPA air filter and air purifiers to tackle indoor air pollution (For an affordable solution, visit http://smartairfilters.com/mn/en/;
- Install monitoring devices;
- Smart Air Mongolia masks
Work activities:
- Ensure company vehicles are well maintained to reduce pollution emissions;
- Drivers/employees instructed to not idle & to turn off vehicle engine when not moving;
- Implement carpooling activities;
- In polluted air, ensure employees wear pollution masks;
Social responsibility:
- Focus CSR (corporate social responsibility) initiatives to tackle air pollution
- Tackle air pollution in UB: UNICEF recommends focusing on areas where children are especially affected, and where urgent interventions need to be put in place to protect them as soon as possible. These include the provision of air filtration systems and electric heaters in kindergartens and schools in some of the worst-affected regions. For more information and guidance, please contact UNICEF for (Nicholas Rees, Энэ и-мэйл хаягийг спамботоос хамгаалсан. Та үзэхийн тулд JavaScript идэвхжүүлэх хэрэгтэй.; and Sunjidmaa, Энэ и-мэйл хаягийг спамботоос хамгаалсан. Та үзэхийн тулд JavaScript идэвхжүүлэх хэрэгтэй.);
- Run marketing/PR campaigns & contests that raise awareness about air pollution.
List of distributors for pollution masks:
- BRB – 70119967, 99658555
- BOX shop – 99062387, 75557007, 90878111 – Facebook: RZ утааны маск
- CATD LLC – 11327308, 99114346
- Mmarket – 75758001 – Facebook: Утааны Маск
- MONOS Pharmacy – 99190858
- Seven summits – 11317923
- 3M Mongolia Premier Service - 9400-3088, 9910-3335
- Utaanii Mask – 99906643 – Facebook: Утааны маск + Агаар шүүгч
- Cycling World Mongolia LLC authorized distributor of RESPRO pollution masks- 77110444
MEMBER-TO-MEMBER SPECIAL OFFERS & BENEFITS:
- Orchuulga 24 is providing a 15% discount on written translation services to BCM Members - Ombol LLC is offering free Hepatitis C medication to employees of BCM member organizations, provided that the individual pays into state health insurance. ECONOMIC INDICATORS
HISTORIC ANNUAL INFLATION
Year 2009 *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
Year 2014 *11.0% [source: NSOM]
Year 2015 *1.9% [source: NSOM]
Year 2016 *1.1% [source: NSOM]
Year 2017 *6.4% [source: NSOM]
Year 2018 *8.1% [source: NSOM]
Year 2019 *5.2% [source: NSOM]
Year 2020 *2.3% [source: NSOM]
Year 2019 *13.4% [source: NSOM]
*Year-over-year (y-o-y), nationwide
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 - 9.75% [source: IMF]
March 11, 2009 - 14.00% [source: IMF]
May 12, 2009 - 12.75% [source: IMF]
June 12, 2009 - 11.50% [source: IMF]
September 30, 2009 - 10.00% [source: IMF]
May 12, 2010 - 11.00% [source: IMF]
April 28, 2011 - 11.50% [source: IMF]
August 25, 2011 - 11.75% [source: IMF]
October 25, 2011 - 12.25% [source: IMF]
March 19, 2012 - 12.75% [source: Mongol Bank]
April 18, 2012 - 13.25% [source: Mongol Bank]
January 25, 2013 - 12.50% [source: Mongol Bank]
April 8, 2013 - 11.50% [source: Mongol Bank]
June 25, 2013 - 10.50% [source: Mongol Bank]
July 30, 2014 - 12.00% [source: Mongol Bank]
January 14, 2015 - 13.00% [source: Mongol Bank]
January 14, 2016 - 12.00% [source: Mongol Bank]
May 6, 2016 - 10.50% [source: Mongol Bank]
August 18, 2016 - 15.00% [source: Mongol Bank]
December 19, 2016 - 14.00% [source: Mongol Bank]
June 15, 2017 - 12.00% [source: Mongol Bank]
December 22, 2017 - 11.00% [source: Mongol Bank]
March 23, 2018 - 10.00% [source: Mongol Bank]
November 27, 2018 - 11.00% [source: Mongol Bank]
March 11, 2019 - 10.00% [source: Mongol Bank]
April 13, 2020 - 9.00% [source: Mongol Bank]
September 14, 2020 - 8.00% [source: Mongol Bank]
November 11, 2020 - 6.00% [source: Mongol Bank]
January 1, 2022 - 6.50% [source: Mongol Bank]
SOVEREIGN CREDIT RATING
| Moody’s |
Fitch |
S&P |
B3 – stable – 16 Mar 2021
B3 – negative – 8 May 2020
B3 – stable – 18 Jan 2018
Caa1 – stable – 30 Mar 2017
Caa1 – neg. watch – 15 Feb 2017
Caa1 – stable – 18 Nov 2016 |
B – stable – 9 Jul 2018
B- – positive – 17 Nov 2017
B- – stable – 22 Nov 2016
B – stable – 24 Nov 2015
B+ – negative – 13 Dec 2013 |
B – stable – 10 Nov 2018
B- – stable – 19 Aug 2016
B – stable – 03 Nov 2015
B+ – neg. – 29 Apr 2015 |
CURRENCY RATES – 4 May 2023
| Currency |
|
|
Rate |
| U.S. dollar |
USD |
|
3,471.46 |
| Euro |
EUR |
|
3,838.74 |
| Japanese yen |
JPY |
|
25.78 |
| British pound |
GBP |
|
4,363.45 |
| Hong Kong Dollar |
HKD |
|
442.35 |
| Russian ruble |
RUB |
|
43.94 |
| Chinese yuan |
CNY |
|
502.12 |
| South Korean won |
KRW |
|
2.62 |
|
