Official foreign reserves and Mongol Bank’s gold acquisition broke records last year.
Mongolia’s foreign reserves amounted to 4.5 billion USD at the end of 2020, increasing by 4.2 percent compared to the previous year. This is reportedly enough to cover 11 months of normal imports.
“Higher foreign reserves boosts public confidence in the national currency, tugrug, and positively affects the credit rating. This is highly significant in strengthening economic immunity,” the central bank noted.
Mongol Bank says that along with effective macro-economic policies, the record-high acquisition of gold attributed to raising foreign reserves.
As of December 28, the central bank had secured 23 tons of gold, breaking the previous record of 22 tons in 2018 and increasing by 7.8 tons compared to the previous year. This reportedly raised foreign reserves by 880 million USD.
Total gold acquisition reached 100 tons in the last five years, generating 3.7 billion USD for the foreign reserves of Mongolia.
The growth of precious metal purchases was due to a 21 percent increase in global gold prices since the beginning of 2020, the opening of a major gold deposit, increased production, and a reduction in smuggling of gold across the border, according to the authorities. The opening of new branches of Mongol Bank in Darkhan-Uul and Bayankhongor provinces, new licenses for precious metal traders, and shifting to digital in notifying precious metal testing and payment has also contributed to improving local gold procurement.