On June 27, 2018, the Executive Board of the International Monetary Fund (IMF) completed the fourth review of Mongolia’s performance under the program supported by a three-year extended arrangement under the Extended Fund Facility (EFF). Completion of the review enables Mongolia to draw the equivalent of SDR 26.2088 million (about US$ 36.91 million), bringing total disbursements under the arrangement to SDR 131.0366 million (about US$ 184.55 million).
Mongolia’s performance under the program remains strong. The combination of strong policy implementation and a supportive external environment has helped the authorities over-perform on all end-March 2018 quantitative targets under the program. Progress has also been made on structural reforms, albeit with some delays.
Mongolia’s three-year extended arrangement was approved on May 24, 2017, in an amount equivalent to SDR 314.5054 million, or about US$ 434.3 million1 at the time of approval of the arrangement (see
Following the Executive Board’s discussion of the review, Mr. Tao Zhang, Acting Chair and Deputy Managing Director, said:
“Mongolia is making good progress under the Fund-supported program. Helped by a favorable external environment and strong program implementation, growth has picked up and there has been a considerable improvement in fiscal substantiality, debt dynamics, and external buffers.
“All end-March 2018 quantitative targets under the program were met. Fiscal accounts showed robust performance posting a primary surplus, mainly reflecting a sharp increase in revenue. Meanwhile, international reserves have more than doubled since the start of the program.
“Reforms to strengthen the financial sector are ongoing with a focus on the follow-up to the asset quality review completed in January. Banks are in the process of raising capital to address any identified shortfalls. In addition, the authorities passed a law outlining when and how public funds can be used to preserve banking sector stability.
“Notwithstanding this progress, Mongolia remains vulnerable to external and internal shocks. It is therefore critical to take advantage of the current favorable economic environment to continue building fiscal and foreign exchange buffers, strengthen the banking sector, and improve the investment climate. A steadfast implementation of the authorities’ reform program is key to build resilience against shocks and ensure continued strong and inclusive growth.”