IMF Executive Board Approves US$99 Million Disbursement Under the Rapid Financing Instrument to Mongolia to Address the COVID-19 Pandemic

Via IMF (Den Internationale Valutafond)

IMF Executive Board Approves US$99 Million Disbursement Under the Rapid Financing Instrument to Mongolia to Address the COVID-19 Pandemic







June 3, 2020











  • The COVID-19 pandemic has taken a large toll on economic activity in Mongolia, giving rise to urgent budget and balance of payments needs.
  • To support Mongolia, the IMF has approved the request for emergency financial assistance under the Rapid Financing Instrument (RFI) of about US$99 million.
  • This emergency financial assistance will help support foreign exchange reserves, create fiscal space for essential pandemic-related expenditure, and catalyze donor support.

WASHINGTON, DC
– The Executive Board of the International
Monetary Fund (IMF) approved Mongolia’s request for emergency financial
assistance under the

Rapid Financing Instrument (RFI)

equivalent to SDR 72.3 million (about US$99 million, or 100 percent of
quota) to meet

urgent budgetary and balance of payment needs

stemming from the outbreak of COVID-19 and to support the most affected
sectors and vulnerable groups.

Following the Executive Board’s discussion of Mongolia, Mr. Mitsuhiro
Furusawa, Deputy Managing Director and Chair, made the following statement:

“Mongolia has successfully avoided a domestic outbreak of COVID-19 thus
far, helped by the early introduction of social distancing and tight health
protocols for cross-border flows. Nonetheless, the pandemic has sharply
reduced economic activity due to both the economic cost of the containment
measures and the fall in external demand. There is now an urgent balance of
payments need and a fiscal financing gap.

“The authorities have already taken a number of measures to limit the
economic contraction and help the most vulnerable. Recent revisions to the
budget allow for higher health and social spending as well as tax relief to
affected households and businesses. In addition, the Bank of Mongolia has
eased monetary and financial policies to help prevent a disorderly
contraction in bank lending to the private sector.

“Emergency financing under the IMF’s RFI will provide much needed support
to respond to the urgent balance of payments and budgetary needs.
Additional assistance from development partners will be required to support
the authorities’ efforts and close the financing gap. The authorities’
commitment to high standards of transparency and governance in the
management of financial assistance is welcome.

“As the immediate threat to the economy subsides, it will be critical to
resume key reforms begun during the recent Extended Fund Facility
arrangement. These include a return to fiscal consolidation to reduce still
high public debt, a more flexible exchange rate to build up foreign
exchange reserves, remedying AML-CFT deficiencies, and stronger supervisory
enforcement to ensure that all banks have sufficient capital.”


IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Keiko Utsunomiya

Phone: +1 202 623-7100Email: MEDIA@IMF.org

@IMFSpokesperson








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