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Bank of Mongolia

From Wikipedia, the free encyclopedia
Bank of Mongolia
Mongolbank
Монголбанк
HeadquartersUlaanbaatar,Mongolia
Ownership100%State owned[1]
Governor[2]Byadran Lkhagvasuren
Central bank ofMongolia
CurrencyMongolian tögrög
MNT (ISO 4217)
ReservesUS$190 million[1]
Websitehttp:// mongolbank.mn

TheBank of Mongolia,orMongolbank(Mongolian:Монголбанк), is thecentral bankofMongolia.[3][4]The main objective of the Bank of Mongolia is to ensure stability of theMongolian tögrög.Within its main objective the Bank of Mongolia promotes balanced and sustained development of the nationaleconomy,through maintaining the stability of money, financial markets and the banking system.

History

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A joint Mongolian-Russian bank, called the "Trade and Industry Bank of Mongolia" (Bank of Mongolia) was opened on June 2, 1924 with head office in Urga and a single branch inAltanbulag.

At that time, the bank's capital was 260000yanchaan(the currency of the period). It operated with 22 employees, 18 of which were Russian specialists and 4 of them were Mongolian. At the start, the joint bank was called by two names, "Trade and Industry Bank of Mongolia", and the "Bank of Mongolia", but it was named the Bank of Mongolia in official papers and documents.

Due to the absence of a national currency, the bank faced difficulties in fulfilling financial and monetary-credit policy in the first 18 months, and foreign currencies were used in circulation.

Consequently, according to the decision ofIkh Khural,theGovernment of Mongoliaissued a resolution to conductmonetary reformon February 22, 1925. In accordance with this resolution, the Bank of Mongolia issued a new national currency, the Tögrög, consisting of 25% for precious metal and foreign stable currency, and 75% for marketable goods.

In 1954, the makeup of the Bank staff had increased to 98% (compare to 18% in 1924). On the basis of this extension, the formerSoviet Uniontransferred its own share of capital and stocks in the Bank of Mongolia to the state of Mongolia. Following this, the Bank of Mongolia was renamed as the State Bank of Mongolia.

In 1991, a completely new 2 level banking system was established in Mongolia. Since its establishment, the Bank of Mongolia has been influencing and contributing efforts on the economy of the country, in maintaining the monetary policy aimed at the stabilisation of the value of the currency, and reduction of theinflation ratein the unstable transitional period.

In May 2010, the Bank of Mongolia tightened its monetary policy stance by raising its policy rate by 1.0 percentage points to 11.00 percent to bring CPI inflation down, to reduce the growth of credit and monetary aggregates.[5][6]

As of April 2012, the Bank of Mongolia had US$2.9 billion in foreign reserves.[7]The foreign reserves on June 30, 2011 contained US$79 million of U.S governmental securities.[8]

Governors

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Ongoing activities

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Bank of Mongolia increased minimumcapital requirementfor banks periodically, and capital adequacy ratio of the banking sector was as high as 14-24 percent since 2000, which is 1.8-3 times higher than international minimum standards. With strong economic growth, private sector credit has increased significantly. Banks’ total outstandingloanswereMNT60 billion which were issued to 1700 borrowers in 2000, compared to total outstanding loans of MNT 2,000 billion issued to 483 thousand borrowers in September, 2007. Ratio of non-performing loans fell to 3.5 per cent in September 2007,[11]down from 24 per cent in 2000[12]and 50% in 1999 following repeated banking crises in the 1990s.[13]Following the2007–2008 financial crisis,this rose again to 20% in 2009 but by June 2010 had fallen to 7.7%.[11]

Financial sector is fully privatized, and now 16 banks, 141non-bank financial institutionsand 131savings and credit cooperativesare operating in Mongolia.Profitabilityof banks was high compared to most advanced countries, which havereturn on assetsratio of 2.7 per cent in 2007. And threecommercial bankssuch asKhan Bank,Xac bankandTrade and Development Bank of Mongoliaare also rated by the agencies on its products, assets and activities. They are on its way to issue securities to foreign market.[citation needed]

The bank is active in developingfinancial inclusionpolicy and is a member of the Alliance for Financial Inclusion.[14]In 2009, the Bank of Mongolia rescuedZoos Bankat a cost ofMNT100 billion, combining it with Anod Bank to form the government-ownedState Bank.[15]Later in 2013, the Mongol Bank was forced to take over the 5th largest lender, Savings Bank, and merge with State Bank, due to a bad loan made to a gold mine owned by its parent company, Just Group, at a cost of $120 million.[16]State Bank is a state-owned company separate from the Bank of Mongolia.

See also

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References

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  1. ^abWeidner, Jan (2017)."The Organisation and Structure of Central Banks"(PDF).Katalog der Deutschen Nationalbibliothek.
  2. ^Bank of Mongolia
  3. ^"Mongolia".Bank for International Settlements.Retrieved5 April2017.
  4. ^"Bank Of Mongolia: Private Company Information - Bloomberg".bloomberg.Bloomberg.Retrieved5 April2017.
  5. ^"Strategy/plan the BoM has for bringing down inflation".Bank of Mongolia. Archived fromthe originalon 2012-06-13.Retrieved2012-06-15.
  6. ^"BoM 2010 Annual Report"(PDF).Bank of Mongolia.Retrieved2012-06-15.
  7. ^"International Reserves, in millions of USD".Bank of Mongolia.Retrieved2012-06-15.
  8. ^"Report on Foreign Portfolio Holdings of U.S. Securities as of June 30, 2011"(PDF).U.S. Department of the Treasury.Retrieved2012-06-15.
  9. ^abcdefghijklmnopqrsBank of Mongolia
  10. ^abcdefHistorical Dictionary of Mongolia - Alan J.K. Sanders
  11. ^abViñals, José; Singh, Anoop (2011),Mongolia: Financial System Stability Assessment(PDF),International Monetary Fund, p. 15
  12. ^Mongolia Government Financial Sector Reform Program (2000-2010)(PDF),World Bank, 2010, p. 12
  13. ^Mongolia Government Financial Sector Reform Program (2000-2010)(PDF),World Bank, 2010, p. 1
  14. ^"AFI members | AFI Global".Archived fromthe originalon 2012-02-20.Retrieved2012-02-23.
  15. ^"₮33 billion spent for Zoos Bank restructure - Business-mongolia".Archived from the original on 2015-09-23.Retrieved2013-09-23.{{cite web}}:CS1 maint: unfit URL (link)
  16. ^Michael Kohn (22 July 2013)."Mongolia to Take Over Savings Bank as Fifth-Largest Lender Fails".Bloomberg.
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