Source : Flickr/Clay Gilliland
As Mongolia tries to implement its economic reform program, the country’s effort was boosted by approval of financial arrangement for the country by IMF.
In a recent meeting, the Executive Board of IMF approved the funding for the country with a total amount of $434.3 million. On the other hand, other partners including Asian Development Bank, the World Bank, Japan, and Korea, have also committed to provide budgetary and project support for the country with a total support of $5.5 billion.
Following the meeting, an official statement said, “Fiscal consolidation is a critical element of this program, including cuts of non-essential expenditures, a move to progressive taxation, pension and public financial management reforms, and steps to strengthen and better target the social safety net. A number of structural fiscal reforms, including an independent fiscal council, will help to bolster budget discipline. Sizable fiscal adjustment, coordinated concessional external financing from development partners, and continued engagement with private creditors will help restore debt sustainability and rebuild international reserves.”
“The commitment to a market-determined exchange rate will strengthen the economy’s resilience to external shocks, supported by prudent monetary policy and the program’s favorable impact on confidence and private sector capital flows. A new central bank law is envisaged to strengthen the governance and independence of the Bank of Mongolia. In addition, implementation of a comprehensive strategy would rehabilitate the banking sector, improve the supervisory and regulatory framework, and strengthen the AML/CFT regime.”
“The program also includes structural reforms to achieve sustainable and inclusive growth. These reforms aim to improve the business environment, promote economic diversification, and encourage foreign direct investment.”