The Influence of Natural Factors on the Spatial Distribution of Aufeis in Ulaanbaatar, Mongolia www.frontiersin.org

Aufeis is a recurring natural phenomenon in Ulaanbaatar, Mongolia, that significantly affects local communities and urban infrastructure during winter. Despite its annual occurrence, the processes and natural factors influencing aufeis formation remain poorly understood. This study investigates the long-term dynamics of aufeis formation and the natural factors controlling its extent and distribution. Landsat satellite imagery from 2009 to 2024 was analyzed to assess multiyear changes in aufeis extent, and drone imagery was employed to map the monthly dynamic changes in aufeis during the winter of 2023-2024. The results show that aufeis typically forms in November, reaches a peak in March, and completely melts by May. Over the past 14 years, aufeis areas ranged from 0.01 km 2 to 0.03 km 2 . However, in the winter of 2023-2024, the aufeis expanded to 0.04 km 2 , with significant encroachment into settlement areas, causing notable damage. This shift in spatial distribution is attributable to changes in ground surface temperature induced by thick snow cover that functioned as thermal insulation and allowed spring water to flow beneath the snow and accumulate in low-lying areas. Furthermore, variations in annual precipitation and geological conditions influenced the extent of aufeis.

TMK drills final Mongolian pilot hole amid development partnership talks www.thewest.com.au

TMK Energy has received strong interest in its Gurvantes XXXV coal seam gas projects in Mongolia from potential partners with financial capability and proven track records in horizontal drilling and fracking.
Management has been encouraged by the response from potential project partners during a recent visit to Mongolia and China and will turn its focus to firming up new players as it executes its drilling schedule at Gurvantes XXXV.
The company has now finalised a drilling contract with specialists Major Drilling for an additional pilot production well at its Nariin Sukhait LF-07 site in Mongolia, after flagging the end of tendering earlier this month.
TMK expects to sign the drilling contract after a final review by the regulator, which is expected shortly. The company finished its final preparations for LF-07 in June and has spudding slated for the second half of July.
It says all its long lead-time items necessary for drilling are onsite and the company has completed drill pad preparation, sumps and other associated site works.
In an independent review delivered to TMK in July, technical consultant Dr Tim Moore of Cipher Consulting, recommended production should continue from a series of pilot wells at TMK’s flagship Gurvantes XXXV project.
Moore said that while a significant gas breakthrough is still awaited from the pilot wells, a slower-than-expected first gas flow is not uncommon in the initial development of greenfield coal seam gas plays, such as the Nariin Sukhait well.
The independent experts agreed that a further well for the pilot project - and its planned placement - are appropriate and that the program meets the company’s 2025 pilot well drilling commitment for its Gurvantes XXXV licence.
TMK is considering further recommendations in its imminent LF-07 pilot well program and in its ongoing development planning as the project advances. It has already put in place an improved mud system for drilling LF-07.
The company will use a bigger, more powerful drill rig than it used for its previous pilot wells. The drilling contract has been structured as a fixed price ‘turnkey’ contract, which reduces the company’s risk exposure to potential cost overruns.
Drilling of LF-07 will most likely be the last vertical pilot well drilled in the current pilot well complex. From this point, the company will design and plan a potential deviated or horizontal drilling and hydraulic fracturing program for next year.
The company last month undertook additional pressure build-up tests on its LF-01 and LF-03 wells to validate and confirm a pressure decline it had measured at LF-02 in April. The tests showed the pressure reduction at LF-02 is also seen at LF-01 and LF-03.
Encouragingly, the reductions suggest the broader area around the pilot production wells is being depressurised. This points to good connectivity between the wells and is key information that can be integrated into the reservoir model.
With the pressure build-up tests completed, the company is now focussing on having all the wells consistently pumping to reach the critical desorption pressure necessary to yield a material increase in well gas flows.
During May, gas production continued from the pilot production well complex in line with expectations and the preceding month’s figures to produce about 8300 cubic metres of gas.
The operating pilot wells continued to produce consistently through May, despite shutdowns required to undertake pressure build-up tests at LF-01 and LF-03 and while awaiting remediation of the LF-05 well.
The equipment required to remediate LF-05 is in Mongolia after some production delays in China, and TMK expects Major Drilling will mobilise its workover rig to the Nariin Sukhait site later this week.
With the timing of LF-07 drilling now locked in, our focus will turn to introducing project partners to the Gurvantes XXXV project. Key attractions of the project to potential partners include the significant size and technical attributes of the resource, its proximity (~20km) to one of the key border crossings between China and Mongolia, the desire of the Mongolian government to develop a gas industry and the enormous and continuing demand from the energy market in China.
TMK Energy chief executive officer Dougal Ferguson
TMK is buoyed by the early interest shown in the project and says discussions are continuing with several parties, including potential project partners with the financial capability and technical competency to help advance the project.
The company is also chasing strategic technical partnerships with selected service providers, particularly China-based companies with proven track records and extensive coal seam gas expertise and the equipment to undertake horizontal drilling and fracking operations for production hole development.
The company sees the significant interest as a strong validation of its project and its significant potential to be a material gas-producing field.

PM plans to cut budget by 2 trillion MNT www.gogo.mn

Prime Minister G.Zandanshatar delivered a keynote address at the plenary session of parliament, presenting his "Savers Statement", a formal policy declaration outlining urgent government measures to reduce public spending alongside a proposed amendment to the 2025 state budget. In his address, the premier warned of a significant fiscal shortfall driven by a sharp decline in coal prices, which could reduce national budget revenues by as much as 3.2 trillion MNT.
“This is not just a temporary concern, it’s a worsening situation,” said G.Zandanshatar. “If we do not act quickly to revise the budget and reduce high-import investments, we risk triggering higher inflation, weakening the MNT, and threatening the financial stability of our citizens, businesses, and economic producers.”
Citing data from an international study, the prime minister highlighted that an one percent increase in inflation could push an additional 24,000 Mongolians into poverty, a stark warning about the potential social impact of unchecked economic pressures.
When the original 2025 budget was approved, coal prices were projected at 105 USD per ton. However, with slowing industrial demand in China, prices have plummeted to around 70 USD per ton, with forecasts suggesting this level may persist for the next one to two years. In response, the government is adopting what G.Zandanshatar called a policy of "Strengthening the State Independently."
The "Savers Statement" lays out a series of cost-saving measures across all levels of government, aiming to freeze or cut non-essential spending. These include suspending plans to raise fuel and heating costs for budget-funded institutions, cutting 28.9 billion MNT from transport, fuel, business travel, and education production costs, reducing foreign delegation and hosting expenses by 4.5 billion MNT, and excluding top-level state visits, halting routine maintenance and equipment purchases, saving 104.4 billion MNT. The measures further include withdrawing 76.8 billion MNT in subsidies to both state and private organizations, eliminating 30.2 billion MNT in one-time bonuses and incentives, and canceling or downsizing numerous public programs and events, saving 617.3 billion MNT.
In total, these measures are expected to reduce expenditures by 1.51 trillion MNT. Additionally, under a recent resolution titled “Budget Savings,” the government will stop financing procurement projects not yet under contract, yielding a further 535.9 billion MNT in savings. Combined, the government aims to trim total budget spending by 2.04 trillion MNT.
According to the revised proposal, the consolidated budget’s revenue will decrease by 3.26 trillion MNT, while expenditures will fall by 1.86 trillion MNT. This results in a budget deficit of 1.36 trillion MNT, equivalent to 1.5 percent of Mongolia’s GDP, a figure that remains within the parameters of the Law on Budget Stability.
Prime Minister G.Zandanshatar concluded by emphasizing that these changes are necessary to maintain financial stability, protect vulnerable households, and reinforce the nation’s economic independence in uncertain global conditions.

The MongolZ announce academy roster / Mongolian passion for Counter-Strike / Why are more teams investing more in Academy Rosters? www.esports-news.co.uk

FIBA 3x3 World Cup 2025: Spain and the Netherlands crowned men's and women's champions www.olympics.com

Spain powered past Switzerland with a 21-17 win for their maiden men’s title at the 3x3 basketball World Cup 2025 in Ulaanbaatar, Mongolia, on Sunday (29 June).
The match was a tight affair in the opening salvos before Spain got their noses in front to take a three-point lead (5-2).
The Swiss closed the gap to get within one point, but the Spanish, led by Diego De Blas, powered back to extend their lead to six.
Spain held off a late charge by Switzerland in the dying minutes of the match as they got within two points (18-16). De Blas contributed 12 points to his team’s score.
Six-time champions Serbia were stopped in their tracks in the semi-finals by a rampant Switzerland. The Swiss team steamrolled the defending champions with a 21-11 rout in the semi-final to march into their maiden final.
Serbia walked away with the bronze medal as a consolation prize as they wiped out a five-point deficit for a 21-16 win.
The Netherlands end the Mongolian Cinderella story
Mongolia’s Cinderella story ended in defeat in the women’s final, with the Netherlands winning their maiden title with a 15-9 triumph. The hosts marched into the final following historic wins over defending champions the United States in the quarter-final before beating Poland in the semis.
The final was a bridge too far for the tenacious Mongolians as the Dutch team took control early in the contest with a 6-1 lead. Mongolia looked poised to launch a fightback halfway into the match. The Netherlands remained undaunted however as they kept the hosts at an arm’s length for their first World Cup title.
In the bronze-medal match, Canada was firing on all cylinders as they denied Poland their best-ever finish at the global showpiece. Canada stormed to a five-point lead and continued to build on that advantage for a commanding 21-9 victory.

First Political Consultations between the Ministries of Foreign Affairs of Mongolia and the Kingdom of Belgium Takes Place in Brussels www.montsame.mn

The First Political Consultations between the Ministries of Foreign Affairs of Mongolia and the Kingdom of Belgium took place in Brussels on June 24, 2025.
During the Consultations, the two sides exchanged information on the current political, social, and economic situation of their countries, as well as on major long-term development policy objectives. They discussed in detail the opportunities to expand bilateral cooperation in mutually beneficial areas. Additionally, the parties exchanged views on effectively celebrating the 55th anniversary of diplomatic relations between Mongolia and the Kingdom of Belgium next year and agreed to focus on implementing legal documents aimed at strengthening exchanges and mutual understanding between the peoples of the two countries.
The sides highlighted that the Agreement on Mutual Recognition and Exchange of Driving Licenses has contributed to creating more favorable living conditions for citizens. The parties also discussed cooperation within the United Nations and other international organizations and shared views on certain issues in international relations.
The First Political Consultation was chaired by Battungalag Gankhuurai, Director of the Department of Europe and Africa at the Ministry of Foreign Affairs of Mongolia, and François Delhaye, Director of the Asia-Pacific Department of the Ministry of Foreign Affairs, Foreign Trade, and Development Cooperation of the Kingdom of Belgium, reported the Ministry of Foreign Affairs of Mongolia.

Opinion: Beyond the Steppe and the Oasis – Uzbekistan and Mongolia Forge a New Eurasian Axis www.timesca.com

When Uzbekistan’s President Shavkat Mirziyoyev arrived in Ulaanbaatar on June 24, for the first state visit of its kind in over thirty years of bilateral relations, it marked far more than a ceremonial milestone—it inaugurated a new continental bridge between Central and Northeast Asia. This long-overdue rapprochement, anchored in pragmatism and shared strategic aspirations, signals a transformative shift in Eurasian diplomacy.
It is a moment not just of bilateral relevance, but of regional consequence. The significance of this visit rests not only in its unprecedented nature, but also in its scope and timing. Concluding just a year after Mongolian President Ukhnaagiin Khurelsukh’s landmark 2024 visit to Tashkent—which laid the groundwork by opening Mongolia’s embassy in Uzbekistan and producing 14 foundational agreements—Mirziyoyev’s trip has formalized the momentum into a ‘Comprehensive Partnership Declaration’.
The outcomes include new trade commitments, transport corridors, cultural and academic ties, and a political alignment that subtly redraws the map of Eurasian cooperation.
Rediscovering Strategic Geography
What makes this partnership compelling is the rediscovery of geography in a post-globalization world. Uzbekistan and Mongolia are both landlocked, Uzbekistan doubly so, and lie at the crossroads of larger powers—Russia, China, and increasingly, the emerging economic spheres of South and West Asia.
For years, both nations were seen as peripheral actors in global politics. Today, however, shifting supply chains, energy diversification, and regional infrastructure projects such as China’s Belt and Road Initiative (BRI) have brought new relevance to their geography. This state visit demonstrated a clear strategic calculus of connectivity, resilience, and regional integration. With the rise of multi-vector diplomacy—long a staple of Mongolia’s foreign policy—Uzbekistan is mirroring similar principles to diversify its partnerships and mitigate geopolitical dependence.
In Mirziyoyev’s words, both countries “agreed to jointly develop efficient transportation routes,” echoing a growing realization that infrastructure is destiny. The immediate fruit of this understanding is the first direct air link between Tashkent and Ulaanbaatar, to be operated by Hunnu Air and Uzbek partners starting in fall 2025.
On the ground, both sides are accelerating the development of a road corridor via Kyrgyzstan and China, creating an East-West axis that could become a vital alternative to congested or politically fraught transit routes. In this regard, the Uzbek-Mongolian corridor aligns with academic assessments that argue for multimodal, decentralized connectivity in post-pandemic Eurasia.
Economic Diplomacy in Action
Although bilateral trade remains modest in volume—just $14 million in 2023—it is growing rapidly, nearly doubling year-on-year. More importantly, it is underpinned by complementary economies. Uzbekistan exports automobiles, textiles, and agricultural products, while Mongolia offers livestock, wool, leather, and minerals. This isn’t simply a matter of goods exchanged, but of value chains being stitched together. The presence of a Chevrolet dealership in Ulaanbaatar and the arrival of over 1,400 Mongolian sheep in Navoi region of Uzbekistan are not anecdotal oddities—they’re signs of a nascent, multidimensional trade ecosystem.
More than 150 companies participated in a bilateral business forum in Ulaanbaatar, resulting in new contracts and a decision to establish a ‘Joint Business Council’. Further, the agreements on investment protection and double taxation avoidance are in the pipeline, vital legal scaffolding for long-term investment and industrial collaboration. These include targeted areas such as mining, agricultural processing, textile manufacturing, and logistics hubs. The potential for livestock clusters, with Mongolian expertise and Uzbek veterinary infrastructure, represents a practical case of south-north agro-cooperation that is rare in continental Asia.
Such economic diplomacy is consistent with the recent shift toward regionally embedded growth strategies, highlighted in recent publications such as the Asian Development Outlook and CSIS. The narrative of “Eurasia rising” is no longer just Chinese-driven—it is now populated with middle powers like Uzbekistan and Mongolia asserting their agency.
Knowledge, Culture, and a Shared Past
Mirziyoyev’s visit also highlighted the human and historical dimension of the partnership. Uzbekistan has offered to increase educational quotas for Mongolian students and revitalize academic exchange, including through universities in Tashkent, Samarkand, and Urgench. Joint archaeological missions and cultural festivals—such as the Days of Uzbek Culture in Ulaanbaatar and Mongolian orchestras performing in Tashkent—serve as more than diplomatic niceties. They are vital threads in a civilizational reconnection between two peoples that once shared the routes of the Great Silk Road.
Indeed, this soft power investment aligns with broader regional aspirations. In both countries, eco-tourism and cultural tourism are gaining prominence. With Uzbekistan’s UNESCO-listed cities and Mongolia’s pristine steppe landscapes, a collaborative Ecotourism Action Plan has already been signed, including joint projects for nature reserves and conservation knowledge sharing.
This also fits with what scholars such as Peter Frankopan, in his book The Silk Roads, have long argued that Eurasia’s future depends on rediscovering the connective tissue of its past. By rooting their cooperation in shared heritage and mutual curiosity, Uzbekistan and Mongolia are fostering a partnership that is durable, not transactional.
Political Alignment and a Quiet Strategic Signal
The political alignment emerging from this visit is subtle but significant. Both nations are constitutionally neutral, but firmly support multilateralism, peaceful development, and regional dialogue. They collaborate in forums such as the United Nations and Shanghai Cooperation Organisation (SCO), and Mongolia has expressed interest in deeper ties with the Organization of Turkic States—where Uzbekistan is a key member.
In this context, the Uzbek-Mongolian declaration of comprehensive partnership is not aimed at countering any major power but at asserting autonomy. It contributes to the emerging architecture of what some scholars call “Eurasian middle diplomacy”—a model where mid-sized states collaborate laterally rather than solely through traditional great-power channels. For Mongolia, this relationship offers access to Central Asia’s population of over 75 million and a platform to reach the Persian Gulf, South Asia, and beyond through Uzbek infrastructure.
For Uzbekistan, it opens the door to East Asia via a partner that, while small in population, is geopolitically agile and resource-rich. It is a mutually empowering alignment, built not on dependence but on co-development.
Shared Environmental Challenges
Beyond trade and transport, both nations face acute environmental vulnerabilities—desertification, water stress, and climate volatility. The convergence of Uzbekistan’s “Yashil Makon” initiative with Mongolia’s “Green Belt” reforestation program indicates a willingness to jointly address ecological degradation. Scholars and climate institutions alike have called for greater cooperation across arid and semi-arid states in Eurasia.
This visit demonstrates such calls are being heeded. A particular area of collaboration could be pastureland rehabilitation, where Mongolian herders possess traditional knowledge and Uzbekistan can offer modern water management and remote sensing tools. This synergy could be critical in managing both climate adaptation and rural development, especially in fragile zones of both nations.
Looking Ahead
This visit has rightly been called historic—but its enduring value lies not in symbolism, but in systems. With a joint road map adopted, clear implementation mechanisms, and monitoring responsibilities assigned, the usual fate of high-level visits—diplomatic inertia—may well be avoided.
Of course, challenges remain. Trade volumes must be scaled up from millions to hundreds of millions. Transport corridors require security, funding, and inter-governmental synchronization. Further, bureaucratic inertia can also dilute private sector enthusiasm. But the political will, institutional alignment, and public enthusiasm on both sides offer a rare combination. In an era where de-risking, regional hedging, and economic fragmentation dominate global headlines, the Uzbekistan-Mongolia partnership offers a quiet but powerful counterpoint.
It is the story of two nations long on the periphery of international narratives, finally turning to each other and discovering opportunity in proximity. The path ahead is not without obstacles—but if nurtured, it may very well shape a new axis of Eurasian cooperation.
The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of the publication, its affiliates, or any other organizations mentioned, including Samarkand State University.
Mohammad Suhail and Mavlon Bobokhonov

SouthGobi Resources' AGM Approval Signals Governance Strength and Strategic Clarity Amid Debt Deferral www.ainvest.com

The recent Annual and Special General Meeting (ASGM) of SouthGobi Resources Ltd. has delivered a resounding vote of confidence in the company's governance, leadership, and strategic execution. With over 99.9% approval for critical resolutions—including the contentious March 2025 Deferral Agreement—the results underscore a rare alignment between stakeholders, even as the company navigates complex debt restructuring. For investors, this marks a pivotal moment to reassess SouthGobi's valuation ahead of potential recovery in Mongolia's coal sector.
Governance Triumph: A Template for Stakeholder Harmony
The ASGM's near-unanimous approvals—spanning auditor reappointment, director elections, and the JD Zhixing Deferral Agreement—reflect robust corporate governance. Notably, the 99.99% approval for the deferral agreement, despite its complexity, suggests shareholders view the deal as necessary for survival and growth. Even the abstention of JD Zhixing Fund (JDZF), SouthGobi's largest shareholder (28.89%), from voting on its own agreement, adhered to strict conflict-of-interest protocols. This recusal, mandated by Canadian and Hong Kong regulations, demonstrates a commitment to fairness for minority shareholders.
The minimal dissent (0.01% against votes) across all resolutions signals that investors trust the board's judgment and the independent governance mechanisms. An Independent Board Committee (IBC) and financial adviser validated the deferral's terms, ensuring transparency. Such rigor is critical in a company where 29% of shares are held by a single entity—a structure that could otherwise breed governance risks.
Ask Aime: What's the outlook for SouthGobi Resources?
The Strategic Imperative: Deferring Debt to Secure Operational Resilience
The March 2025 Deferral Agreement, which delays US$137.8 million in payments (including deferred interest and management fees) until August 2026, is not merely a stopgap. By stretching obligations, SouthGobi secures breathing room to pursue refinancing or restructuring without immediate liquidity crises. The deferral fees—6.4% on Convertible Debenture liabilities and 1.5% on management fees—appear reasonable compared to historical third-party financing costs (15–16.8%) and industry peer rates (3–13.2%).
The agreement's terms also include operational safeguards. SouthGobi must consult JDZF on executive appointments and provide monthly financial updates, balancing creditor protections with operational autonomy. This dual focus on stability and flexibility positions the company to capitalize on Mongolia's coal export potential, particularly to China, its primary buyer.
Risks Mitigated, but Vigilance Remains
The primary risk—default under the Convertible Debenture or Deferral Agreement—remains theoretical but material. Should SouthGobi fail to meet obligations, all deferred amounts become immediately due, risking insolvency. However, the company's commitment to “best efforts” repayment and monthly repayment discussions with JDZF suggest a collaborative approach to avoiding such outcomes.
A secondary risk lies in the variable PIK Interest component, which ties repayment to the 50-day volume-weighted average price (VWAP) of SouthGobi's shares. A prolonged slump in share price could inflate the debt burden. Yet, with the stock trading at a 52-week low of US$0.18 (as of June 2025), the downside appears limited, and any recovery in coal demand or equity markets could swiftly narrow this gap.
Bullish Thesis: Capitalize on Undervaluation Ahead of a Mongolian Coal Turnaround
SouthGobi's stock trades at a fraction of its 2023 highs, reflecting investor anxiety over debt and geopolitical risks in Mongolia. Yet, the ASGM's results and deferral agreement now provide a clearer path to sustainability. With JDZF's financial support anchored through 2026 and governance credibility bolstered, the company can focus on optimizing its Ovoot Tolgoi mine and exploring new coal deposits in the South Gobi region.
China's energy transition has created uncertainty, but coal remains a near-term staple for its power sector. Mongolia's coal exports to China, which account for 90% of SouthGobi's revenue, could rebound if Beijing prioritizes energy security over carbon neutrality in the short term. The company's low valuation (P/B of 0.3x) and 2024 net debt-to-EBITDA ratio of 2.5x (post-deferral) suggest it is undervalued relative to peers.
Conclusion: A Strategic Buy for Patient Investors
SouthGobi's AGM outcomes have transformed a potential governance crisis into a catalyst for stakeholder alignment. The deferral agreement, while not a permanent solution, buys time for strategic execution. For investors, the stock's current valuation offers an asymmetric opportunity: limited downside given its low price and balance sheet flexibility, with upside exposure to a Mongolian coal rebound.
Investment recommendation: Accumulate positions in SGQHF at current levels, targeting a 12-month price target of US$0.30–0.40, assuming stabilization in debt talks and a 20% rise in coal exports to China. Monitor closely for progress in debt restructuring and quarterly operational updates.
The path forward is fraught with risks, but SouthGobi's governance credibility and strategic clarity now justify a bullish stance.

Mongolia: Staff Concluding Statement of the 2025 Article IV Mission www.imf.org

An International Monetary Fund (IMF) staff mission, led by Mr. Tahsin Saadi Sedik, conducted discussions as part of the 2025 Article IV consultation with the Mongolian authorities in Ulaanbaatar during June 4–18, 2025. At the end of the visit, the mission issued the following statement, summarizing its key findings and recommendations.
During 2023‒24, record-high coal exports and increased government spending led to buoyant economic activity, which, along with fiscal surpluses and successful debt rollovers, also helped reduce vulnerabilities.
The resource boom is weakening amid rising risks. With coal exports declining in recent months, mainly due to falling prices, and increased global uncertainty, the near-term outlook has become less favorable, and downside risks have increased amid limited policy buffers.
The policy priority is to increase resilience of the Mongolian economy to downside risks by restoring both internal and external balances, and by preserving buffers. This requires greater fiscal prudence and adherence to fiscal rules, tight monetary and macroprudential policies, and increased exchange rate flexibility.
Should downside risks materialize, significant and timely policy adjustments—particularly fiscal tightening—will be required to safeguard macroeconomic and financial stability.
Recent economic developments, outlook, and risks
Since the 2023 Article IV consultation, Mongolia’s macroeconomic conditions have improved. A resource-driven boom during 2023‒24 led to buoyant economic activity, despite a sharp contraction in the agriculture sector. Budget revenues from the mining sector more than doubled, enabling fiscal surpluses and contributing to the accumulation of foreign exchange reserves and savings in the sovereign wealth fund despite a significant increase in public spending, which together with debt repayments helped reduce debt-to-GDP ratio from 64.5 percent in 2022 to 44.5 percent in 2024 (IMF staff definition). Rating agencies have upgraded Mongolia’s sovereign credit rating to B+/B2, and its sovereign spread narrowed to historically low levels before the volatility spiked amid global trade tensions. The IMF staff’s Sovereign Risk and Debt Sustainability Framework (SRDSF) indicates a moderate risk rating compared to the high-risk rating in the 2023 SRDSF. However, the sharp increase in public spending in 2023-24, including wages and capital expenditures, resulted in a highly expansionary fiscal policy stance, which together with the policy rate cuts, despite the tightening of reserve requirements, fueled rapid credit growth and inflation pressures, and led to a surge in imports and a shift in the current account from surplus to deficit in 2024.
In early 2025, the commodity boom began to lose momentum, and the outlook has weakened amid rising downside risks. Mongolia’s coal export receipts declined sharply, mainly due to falling prices, resulting in a sizeable shortfall in budget revenues and a further widening of the current account deficit, which led to a reduction in foreign exchange reserves and increased depreciation. Credit growth and inflation remain high despite some recent moderation, with inflation standing above the Bank of Mongolia (BOM)’s target band.
Policies to Navigate a Weaker Outlook and Increased Risks 
Fiscal policy
Greater fiscal prudence and adherence to the fiscal rules are critical to restoring external and internal balances and preserving fiscal buffers. Despite the decline in revenues, the authorities plan to meet the structural fiscal balance target envisaged in the 2025 Budget and the recently approved medium-term fiscal framework through expenditure restraint. To achieve this objective, the government needs to articulate detailed and credible measures. It is critical that these measures safeguard social spending to protect the most vulnerable. Should downside risks materialize, an ambitious consolidation strategy would be needed to preserve macroeconomic stability. To ensure the credibility of fiscal rules as a policy anchor, compliance with the rules will be critical. In particular, large investment projects should be implemented within the fiscal deficit and debt rules, as defined in the Fiscal Stability Law.
As a priority, the tax package currently under discussion should be reconsidered. While the package includes several positive elements, such as modernizing the tax administration, broadening VAT base, introducing digital service tax and strengthening progressive tax structure, it would result in a substantial and permanent reduction in non-mining tax revenues. This would increase the overall deficit, reduce the government’s fiscal space to implement critically needed development projects, and hinder compliance with fiscal rules, while also increasing the budget’s vulnerability to volatile mining revenues. In addition, some elements of the tax package need to be further refined to align with international best practices. The package also includes some measures, such as a progressive VAT, for which Mongolia’s tax administration is not yet prepared. Instead, reform efforts should focus on strengthening non-mining revenue mobilization by streamlining tax incentives, collecting tax arrears, and implementing tax and customs administration reforms.
Further reforms are needed to mitigate fiscal risks. Efforts should focus on improving the targeting of social assistance, which would help address the perceived inequitable distribution of mining wealth. Implementation of mega projects should be prioritized according to the availability of external financing and the economy’s absorptive capacity. Coordination with subnational entities needs to be strengthened to ensure fiscal discipline of the general government. Legal frameworks governing state-owned enterprises (SOEs) and public-private partnerships should be enhanced. Building on recent efforts, the Ministry of Finance’s capacity to monitor and mitigate related fiscal risks should be further strengthened. The Development Bank of Mongolia’s long-standing balance-sheet and governance issues need to be addressed promptly. Expanding domestic debt issuance is critical to establishing a benchmark yield curve to help develop domestic markets and to reduce Mongolia’s reliance on external borrowing.
Monetary and Exchange Rate Policies
Domestic financial conditions should remain tight to contain credit growth and inflation. Despite the policy rate hike in early 2025 and some moderation in recent months, inflation is expected to stay above the BOM’s target band over 2025–26. A further rate increase may be warranted if the recent decline in inflation reverses, including through exchange rate depreciation. At the same time, there is scope to recalibrate reserve requirements. Excessive reliance on reserve requirements may incentivize banks to seek external funds with more than one year maturity, which are excluded from these requirements, thus increasing the BOM’s exposure to exchange rate risks through its foreign exchange swaps with banks.
Greater exchange rate flexibility would strengthen Mongolia’s resilience to external shocks. The BOM should pursue opportunistic accumulation of reserves when market conditions allow. The BOM should support a more effective exchange rate price-discovery mechanism by gradually reducing its role as an intermediary and structural provider of FX to the market. In addition, the BOM should support the development of domestic FX derivatives markets and phase out its role as the dominant provider of FX hedging instruments to banks.
Reforms to strengthen the BOM’s effectiveness should be accelerated. As a priority, the BOM should fully withdraw from subsidized mortgage program, which undermines the transmission of monetary policy and jeopardizes the independence of the central bank. The government should expedite the transfer of the BOM's subsidized mortgage program and relieve the BOM of its obligation to channel the newly established Savings Fund toward the expansion of the mortgage program. Moreover, the proposed amendments to the central bank law, aimed at strengthening the BOM’s mandate, as well as the operational autonomy, and governance, should be finalized and submitted to Parliament. Furthermore, the Ministry of Finance and the BOM need to agree on a memorandum of understanding that outlines a gradual recapitalization strategy for the BOM that is consistent with fiscal sustainability.
Macroprudential and Financial Sector Policies
Macroprudential frameworks and financial oversight should be strengthened to mitigate financial stability risks, including rapid credit growth. The recent tightening of macroprudential measures, including the reduction of Debt-Service-To-Income (DSTI) limits, for banks and non-bank financial institutions (NBFIs) is a welcome development. Further efforts are needed, including aligning the DSTI limit for NBFIs with that of banks and expanding the BOM’s macroprudential toolkit to include countercyclical capital buffers, liquidity coverage ratios, and net stable funding ratios. Macroprudential and monetary policies should be separated in terms of formulation and implementation. The ongoing transition toward a risk-based, forward‑looking supervisory approach is welcome. The interconnections between banks and NBFIs should be closely monitored. Amendments to the BOM and Banking Laws are critical to ensure greater legal protection for supervisors and more effective inter-agency information sharing and coordination. The strengthening of crisis management arrangements and clarifying the resources available for resolutions would also help reduce financial stability risks.  
Reforms are also needed to enhance the financial sector’s ability to lend to creditworthy entities. The objective is to reduce the cost of lending, especially to small and medium-sized enterprises. This could be done by amending the Credit Information and Insolvency Laws to enable more effective and timely credit assessment and collateral evaluation, and to streamline foreclosure and insolvency processes. In addition, efforts to diversify bank ownership structures should continue, which may require increasing ownership limits, and allowing investment in multiple banks. This should be complemented with effective supervision of complex ownership structures to mitigate the risks associated with connected and related-party lending.  
Structural Policies
Further improvements to the business climate and governance that build on recent progress would boost Mongolia’s long-term growth prospects. The substantial state footprint in the economy and frequent regulatory changes dampen private sector initiatives and discourage FDI. Reform efforts should focus on reducing red tape, streamlining licensing procedures, improving tax compliance and land use processes, and ensuring consistent and transparent judicial and regulatory enforcement. Governance in the public sector also requires strengthening. This includes addressing corruption vulnerabilities in revenue institutions, strengthening the transparency and accountability of public procurement and SOEs, and implementing legislative reforms, including the SOE Law and Whistleblower Protection Law. Mongolia has made satisfactory progress in strengthening its anti‑money laundering and counter-financing of terrorism legal framework, though challenges related to effective implementation remain.
Climate adaptation, mitigation, and green transition will require significant investments and policy reforms. Adaptation actions are needed given increase in the frequency and intensity of natural hazards, such as harsh winters and floods, while mitigation actions are needed to address Mongolia’s high carbon intensity and to reduce air pollution. In addition, preparations are needed to address the expected decline in China’s coal demand as it advances its energy transition and decarbonization agenda. So far, implementation of Mongolia’s climate agenda remains limited. Climate adaptation measures have yet to be fully integrated into sectoral policies and budget processes. Moreover, there is no dedicated climate change law to mandate cross-sectoral coordination. Advancing Mongolia’s climate objectives will require significant financial contributions from both the public and private sectors, underscoring the importance of creating fiscal space.
The staff team expresses its sincere gratitude to the authorities and to a broad range of public and private sector counterparts for their warm hospitality and for the candid, constructive discussions.
See the full article at https://www.imf.org/.../mongolia-staff-concluding...

Mongolia upset USA at FIBA 3x3 World Cup 2025 quarter-finals www.fiba.basketball

Mongolia sent a packed and booming home crowd in a frenzy on Saturday, when they bucked the odds and stunned USA, 18-15, in a massive win to punch their ticket to the FIBA 3x3 World Cup Semi-Finals in style.
Khulan Onolbaatar stepped up to the plate once more and delivered under the bright lights, scoring eight of her nine points from the 2-point line. Onolbaatar also accounted for four of Mongolia’s six 2s against USA.
Ariuntsetseg Bat-Erdene scored five along with five boards, while Nandinkhusel Nyamjav also added four for Mongolia, including the last two free throws in the final 1.7 seconds to keep the game out of USA's reach and seal the momentous win.
It’s an upset of monumental proportions for the 10th-ranked Mongolia, who had to fight their way through the Play-In Round with a huge, gritty win vs. China before stunning the USA, the fifth-ranked team in the world.
“It still feels unreal,” Onolbaatar said. “This is the best team in the world and then we beat them in the Quarter-Finals in front of our home crowd. They were so amazing.
“I cannot describe it in words,” she added. “But we’re not done. As Steve Sir says, we’re hungry for two more tomorrow. Our magical run continues.”
USA came into the matchup as favorites after sweeping pool play at 4-0, but Mongolia's defense poise under high-stakes pressure made them a dangerous draw -- and that's exactly how it played out vs. the Americans, where some stifling work off-ball and a ton of composure proved to be the key as the game progressed for Mongolia.
After an Onolbaatar to give Mongolia a 10-6 lead with 5:20 left gave the crowd at Sukhbaatar Square a reason to erupt, USA crawled back and kept it a tense affair behind leading scorer Sarah Strong, who fired 11 points to keep her squad within striking distance along the way.
A Strong post-up tied it at 15 apiece with 34 seconds left, but an Onolbaatar bucket off a a broken play with 18 seconds left gave Mongolia some breathing room for a lead they would not relinquish up until the final buzzer. A key stop in the final possession prevented USA from tying things up, while Nyamjav's steady hands at the line for two free throws later iced the game for Mongolia
Timely 2s every time USA made a push kept the Americans at bay. Facing a significant size advantage in the paint, the Mongolians leaned on their shooting from the 2-point line, where they scored 12 on 24 shots while taking just a total of eight shots inside the arc. USA, in contrast, attempted just eight 2s and went 11-for-23 in the paint.
Mongolia will now head on to Sunday to face Poland in what should be a highly-anticipated Semi-Final matchup set at 17:25.