Debt-ridden Mongolia asks IMF to resume economic bail-out

Source: Xinhua| 2017-10-06 17:47:07|Editor: Zhou Xin
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ULAN BATOR, Oct. 6 (Xinhua) -- The newly appointed prime minister of Mongolia has asked the International Monetary Fund (IMF) to continue its 5.5-billion-U.S.-dollar economic bail-out program for his cash-strapped country.

Prime Minister Khurelsukh Ukhnaa, in his first meeting with Neil Saker, IMF resident representative, said he will continue cooperation with the IMF. He asked Saker to convey the request for resumption of the bail-out program, called "Extended Fund Facility," to IMF Managing Director Christine Lagarde.

The IMF suspended the program in mid-September when the earlier government of J. Erdenebat was dismissed by parliament and said it needs to see if the new government is willing to continue the program.

Mongolian President Battulga Khaltmaa and some lawmakers from both the ruling and opposition parties are, however, critical of the program, saying it did not reflect Mongolian specifics and was tantamount to borrowing more just to pay previous loans, which is contrary to the government's plan.

According to the Mongolian Ministry of Finance, the country's foreign debt stands at 25.2 billion U.S. dollars. The government is due to pay back 500 million dollars in January 2018.

Finance Minister Choijilsuren Battogtokh has warned that if the government uses the hard currency reserve for foreign debt repayment, it may deplete the currency reserve necessary for keeping the national currency, the tughrik, stable, and may lead to its devaluation.

Currently, one U.S. dollar is equal to over 2,462 Mongolian tughrik.

Currently, with all the financial problems arising from the shortage of cash reserves, analysts predict that the government has no choice but to request resumption of the IMF's bail-out program.