ULAN BATOR, July 25 (Xinhua) -- Mongolia's central bank announced on Thursday that it has bought a total of 7.8 tons of gold from legal entities and individuals since the beginning of this year, down by 14.5 percent year-on-year.
The decline was mainly related to the expiration of the effective period of low royalty taxes on gold with the 2014 amendments to the Minerals Law, the bank's spokesperson Dugerjav Orgil told a press conference.
The 2.5 percent of discounted royalty on gold mining ended on Jan. 1. From then on, 5 to 10 percent royalty taxes on gold mining have been imposed on miners, resulting in the decrease of the central bank's gold purchase by 71.6 percent year-on-year in the January-March period.
To revive the central bank's gold purchases, the country's parliament has set the gold royalty at a 5-percent rate.
Gold purchase by the Bank of Mongolia has been continuously increasing since the discounted royalty on gold mining entered into force on April 8.
Purchasing gold is said to be one of the key instruments for the mineral-rich country's central bank to increase its official foreign exchange reserves.
The Bank of Mongolia purchased only 12.7 tons of gold in 2014. Thanks to the low royalty taxes on gold with the 2014 amendments, its annual gold purchase almost doubled in 2018, reaching 22 tons.
