Mongolia to get $5bn loan from IMF
The Mongolian government and envoys from the International Monetary Fund agreed on terms for a more than $5 billion loan package to help get its economy back on track.
Mongolia is to get $5bn loan from IMF. The Mongolian government and envoys from the International Monetary Fund agreed on terms for a more than $5 billion loan package to help get its economy back on track. The deal is subject to approval by the IMF’s executive board, which is expected to consider Mongolia’s request in March. Under the preliminary agreement, the IMF would provide $440 million over three years. The Asian Development Bank (ADB), World Bank, Japan and South Korea are together expected to provide up to $3 billion, and the People’s Bank of China (PBC) is expected to extend its 15 billion RMB ($2 billion) swap line with the Bank of Mongolia for at least another three years, the IMF said in a statement. Finance Minister Choijilsuren Battogtokh the government proposed to bring in more money for the budget by increasing income, fuel and other taxes, and by raising the retirement age from 55 to 65 for women, and from 60 to 66 for men. Its proposals have to be approved by Parliament during a session in March, which is likely because the ruling Mongolian People’s Party has a clear majority. The IMF statement said the loan agreement would mean Mongolia has to strengthen its banking system and adopt fiscal reforms to ensure that budget discipline is maintained. Generally, terms required by the IMF as a condition for such lending prompt complaints in borrower countries that the conditions hurt the poor or undercut economic growth by reducing social spending or investment in public facilities.
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