Bank of Mongolia

Bank of Mongolia
Монголбанк
Headquarters	Ulaanbaatar, Mongolia
Coordinates	47°55′12″N 106°54′44″E / 47.919889°N 106.912275°E / 47.919889; 106.912275
Established	1991
President	Mr. Bayartsaikhan N
Central bank of	Mongolia
Currency	Mongolian togrog MNT (ISO 4217)
Succeeded by	Trade and Industry Bank of Mongolia
Website	http://www.mongolbank.mn

The Bank of Mongolia, or Mongolbank, is the central bank of Mongolia. The main objective of the Bank of Mongolia is to ensure stability of the Mongolian tögrög. Within its main objective the Bank of Mongolia promotes balanced and sustained development of the national economy, through maintaining the stability of money, financial markets and the banking system.

In order to implement its objectives as set forth in this law, the Bank of Mongolia shall conduct the following activities:

Issuing currencies into circulation;
Formulation and implementation of monetary policy by coordinating money supply in the economy;
Acting as the Government's fiscal intermediary;
Supervision of banking activities;
Organization of inter-bank payments and settlement;
Holding and management of the State's reserves of foreign currencies.

History

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

At that time, the bank's capital was 260000 yanchaan (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 of Ikh Khural, the Government of Mongolia issued a resolution to conduct monetary reform on 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 former Soviet Union transferred 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 the inflation rate in 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.^[1]^[2]

As of April 2012, the Bank of Mongolia had USD $2.9 billion in foreign reserves.^[3] The foreign reserves on June 30, 2011 contained USD $79 million of U.S governmental securities.^[4]

Ongoing activities

Bank of Mongolia increased minimum capital requirement for 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 outstanding loans were MNT 60 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, down from 30 per cent in 2000.

Financial sector is fully privatized, and now 16 banks,141 non-bank financial institutions and 131 savings and credit cooperatives are operating in Mongolia. Profitability of banks was high compared to most advanced countries, which have return on assets ratio of 2.7 per cent in 2007. And three commercial banks such as Khan Bank, Xac bank and Trade and Development Bank of Mongolia are also rated by the agencies on its products, assets and activities. They are on its way to issue securities to foreign market.

In 2008, the US IRS presented a tax report before the Director General Zorig Luvsandash from the General Department of National Taxation of the Republic of Mongolia.

The bank is active in developing financial inclusion policy and is a member of the Alliance for Financial Inclusion.^[5] In 2009, the Bank of Mongolia rescued Zoos Bank at a cost of MNT 100 billion, combining it with Anod Bank to form the government-owned State Bank.^[6] 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.^[7] State Bank is a separate state-owned company from Mongol Bank.

References

↑ "Strategy/plan the BoM has for bringing down inflation". Bank of Mongolia. Retrieved 2012-06-15.
↑ "BoM 2010 Annual Report" (PDF). Bank of Mongolia. Retrieved 2012-06-15.
↑ "International Reserves, in millions of USD". Bank of Mongolia. Retrieved 2012-06-15.
↑ "Report on Foreign Portfolio Holdings of U.S. Securities as of June 30, 2011" (PDF). U.S. Department of the Treasury. Retrieved 2012-06-15.
↑ http://www.afi-global.org/about-afi/members
↑ "₮33 billion spent for Zoos Bank restructure - Business-mongolia.com".
↑ Michael Kohn (22 July 2013). "Mongolia to Take Over Savings Bank as Fifth-Largest Lender Fails". Bloomberg.com.

External links

Central banks

Global

Global	Bank for International Settlements Basel Committee on Banking Supervision Financial Stability Board

By continent

Africa	Bank of Central African States Central Bank of West African States Bank of Algeria National Bank of Angola Bank of Botswana Bank of the Republic of Burundi Bank of Cape Verde Central Bank of the Comoros Central Bank of the Congo Central Bank of Djibouti Central Bank of Egypt Bank of Eritrea National Bank of Ethiopia Central Bank of The Gambia Bank of Ghana Central Bank of the Republic of Guinea Central Bank of Kenya Central Bank of Lesotho Central Bank of Liberia Central Bank of Libya Central Bank of Madagascar Reserve Bank of Malawi Central Bank of Mauritania Bank of Mauritius Bank Al-Maghrib (Morocco) Bank of Mozambique Bank of Namibia Central Bank of Nigeria National Bank of Rwanda Central Bank of São Tomé and Príncipe Central Bank of Seychelles Bank of Sierra Leone Central Bank of Somalia Bank of Somaliland South African Reserve Bank Bank of South Sudan Central Bank of Sudan Central Bank of Swaziland Bank of Tanzania Central Bank of Tunisia Bank of Uganda Bank of Zambia Reserve Bank of Zimbabwe

Americas	Central Bank of Argentina Central Bank of Aruba Central Bank of The Bahamas Central Bank of Barbados Bermuda Monetary Authority Central Bank of Brazil Bank of Canada Central Bank of Chile Bank of the Republic (Colombia) Central Bank of Cuba Central Bank of Curaçao and Sint Maarten Eastern Caribbean Central Bank Cayman Islands Monetary Authority Central Bank of Ecuador Bank of Guatemala Bank of the Republic of Haiti Central Bank of Honduras Bank of Jamaica Bank of Mexico Central Bank of Nicaragua Central Reserve Bank of Peru Central Bank of Suriname Central Bank of Trinidad and Tobago Federal Reserve System (United States) Central Bank of the Uruguay Central Bank of Venezuela

Asia	Da Afghanistan Bank Central Bank of Bahrain Bangladesh Bank Royal Monetary Authority of Bhutan Brunei Currency and Monetary Board Autoriti Monetari Brunei Darussalam National Bank of Cambodia People's Bank of China Hong Kong Monetary Authority Reserve Bank of India Bank Indonesia Central Bank of the Islamic Republic of Iran Central Bank of Iraq Bank of Israel Bank of Japan Central Bank of Jordan National Bank of Kazakhstan National Bank of the Kyrgyz Republic Bank of Korea Central Bank of the Democratic People's Republic of Korea Central Bank of Kuwait Banque du Liban Monetary Authority of Macao Bank Negara Malaysia Maldives Monetary Authority Bank of Mongolia Central Bank of Myanmar Nepal Rastra Bank Central Bank of Oman State Bank of Pakistan Palestine Monetary Authority Bangko Sentral ng Pilipinas Qatar Central Bank Saudi Arabian Monetary Agency Monetary Authority of Singapore Central Bank of Sri Lanka Central Bank of Syria Central Bank of the Republic of China (Taiwan) Bank of Thailand Central Bank of Turkmenistan Central Bank of the United Arab Emirates Central Bank of Uzbekistan State Bank of Vietnam Central Bank of Yemen

Europe	European Central Bank (Eurosystem) National Bank of the Republic of Abkhazia Bank of Albania Central Bank of Armenia National Bank of Austria Central Bank of Azerbaijan National Bank of the Republic of Belarus National Bank of Belgium Central Bank of Bosnia and Herzegovina Bulgarian National Bank Croatian National Bank Central Bank of Cyprus Czech National Bank Danmarks Nationalbank (Denmark) Deutsche Bundesbank (Germany) Bank of England Bank of Estonia Bank of Finland Banque de France National Bank of Georgia Bank of Greece Hungarian National Bank Central Bank of Iceland Central Bank of Ireland Banca d'Italia Central Bank of Kosovo Bank of Latvia Bank of Lithuania Central Bank of Luxembourg National Bank of the Republic of Macedonia Central Bank of Malta National Bank of Moldova Central Bank of Montenegro De Nederlandsche Bank Norges Bank Central Bank of the Turkish Republic of Northern Cyprus National Bank of Poland Banco de Portugal National Bank of Romania Central Bank of Russia National Bank of Serbia National Bank of Slovakia Bank of Slovenia Gosbank (Soviet Union) Bank of Spain Swedish National Bank Swiss National Bank Central Bank of the Republic of Turkey National Bank of Ukraine

Oceania	Reserve Bank of Australia Reserve Bank of Fiji Reserve Bank of New Zealand Bank of Papua New Guinea Central Bank of Samoa Central Bank of Solomon Islands National Reserve Bank of Tonga Reserve Bank of Vanuatu

Policies and implementation

Policies	Capital requirement Contractionary monetary policy Expansionary monetary policy Basel II Basel III Basel 4

Implementation	Capital control Discount rate Interest rates Money creation Open market operation Sovereign wealth fund

Bretton Woods system

International Monetary Fund World Bank Group International Bank for Reconstruction and Development International Centre for Settlement of Investment Disputes International Development Association International Finance Corporation Multilateral Investment Guarantee Agency

Lists

List of central banks Central banks and currencies of Africa Central banks and currencies of Asia-Pacific Central banks and currencies of the Caribbean Central banks and currencies of Europe Central banks and currencies of Central America and South America

Names in italics indicate non-sovereign (dependent) territories, former countries, or states with limited recognition

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