MIAT to Expand Cooperation with Boeing www.montsame.mn

MIAT State-Owned Joint Stock Company and Boeing are set to expand their cooperation by flexibly addressing aircraft market pricing and payments and establishing a mutually beneficial financing structure.

Delgersaikhan Borkhuu, Minister of Roads and Transport, emphasized this commitment during a meeting with a delegation led by Jeff Edwards, Vice President of Commercial Sales and Marketing for North Asia at Boeing. During the meeting, the two sides exchanged views on the development of Mongolia's aviation market, the economic efficiency of aircraft, and financial terms, the Ministry of Roads and Transport reported.

Minister Delgersaikhan noted that Mongolia is developing its air transport sector as a leading economic priority, aiming to become a regional aviation hub by leveraging its advantageous geographic location connecting Asia and Europe. The parties discussed expanding relations between MIAT and Boeing, securing favorable financial terms for aircraft purchases, and strengthening technical collaboration. Specifically, the Mongolian side expressed interest in acquiring next-generation Boeing aircraft that feature low operational costs, eco-friendly designs, and high fuel efficiency.

MIAT has been operating Boeing aircraft for its international flights since 1992, maintaining a steadily developing partnership with the company.

Mongolia's forex reserves hit record high of 7.9 bln USD www.xinhuanet.com

Mongolia's foreign exchange reserves reached a record high of 7.9 billion U.S. dollars at the end of July, local media reported on Thursday, citing the nation's central bank, the Bank of Mongolia.

The reserves increased by 13.67 percent from the beginning of the year and 4.0 percent from the previous month, reflecting continued growth in the Asian country's forex reserves, according to the central bank.

The Bank of Mongolia said that an adequate level of foreign exchange reserves is generally considered sufficient to cover three to six months of the country's imports. It added that the current level of reserves is more than adequate to meet this benchmark.

According to the central bank, Mongolia aims to increase its foreign exchange reserves to 10 billion U.S. dollars over the long term.

IMF Executive Board Concludes 2026 Article IV Consultation with Mongolia www.imf.org

The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with Mongolia and endorsed the staff appraisal without a meeting on a lapse-of-time basis.[2] The authorities have consented to the publication of the Staff Report prepared for this consultation.[3]

Despite a sharp decline in coal prices, Mongolia’s macroeconomic outcomes in 2025 were better than expected. A strong recovery in agricultural output and solid mining production supported growth, while higher copper exports and softer import demand helped narrow the current account deficit. Buoyant mining activity underpinned strong GDP growth through April 2026 (7.8 percent y/y), although underlying growth momentum remained subdued. Inflation has risen since March 2026 following several months of moderation, driven by surging meat and energy prices and reaching 12.0 percent y/y in June.

Growth is projected to remain robust in 2026 despite headwinds from higher energy prices and global uncertainty. Strong mining activity is expected to help offset weaker non-mining growth and further improve the current account balance, although growth is projected to moderate from the high level recorded in 2025 as the boost from agricultural base effects fades. Inflation is projected to remain elevated at around 10 percent by year-end amid high food and fuel prices, before easing gradually thereafter. The outlook remains subject to significant downside risks, including domestic policy slippages amid social and populist pressures ahead of the elections, as well as Mongolia close links to developments in global commodity markets and external demand.

Executive Board Assessment

Despite multiple shocks, Mongolia’s economy has remained resilient. In 2025, economic activity benefited from a sharp recovery in agriculture and strong mining activity, notwithstanding declining coal prices. The current account deficit narrowed as surging copper exports and moderating imports more than offset weaker coal exports. Nevertheless, the external position in 2025 is assessed to remain weaker than implied by fundamentals and desirable policy settings. Strong growth continued into early 2026, supported by buoyant mining production, but is projected to moderate owing to base effects. Headline inflation started rising again amid higher food and fuel prices and is expected to remain elevated throughout the year.

Vulnerabilities remain elevated, with the balance of risks to the outlook tilted to the downside. Key downside risks stem from a potential deterioration in external financing conditions due to fiscal slippages and higher debt, given political pressures to further reduce non-mining taxes and increase current spending, especially wages and pensions. External risks include heightened geopolitical tensions, including adverse spillovers from the Middle East conflict and Russia’s war in Ukraine, as well as uncertainty about prospects for coal exports to China and commodity prices.

Fiscal policy should prioritize rebuilding buffers and safeguarding sustainability. The submission of a supplementary budget to Parliament is a priority, to avoid end-year cash shortages as in 2025. The recently approved tax package should be reconsidered given its adverse impact on non‑mining revenues. Efforts should instead focus on tax policy and administrative reforms to strengthen them. Higher non-mining revenue, together with greater efficiency in current spending, would create space for much-needed development spending and rebuilding buffers. Public financial management and fiscal transparency need to be strengthened to enhance the credibility of the budget, including through a well-defined MTFF, more realistic budget formulation, and stronger governance of mining funds. Mongolia has benefited from the fiscal rules, and policy measures that undermine their credibility should be avoided, including the selective exclusion of public investment projects. Fiscal measures in response to higher fuel prices should be temporary and well‑targeted, while preserving price signals. Reducing reliance on external financing would strengthen fiscal resilience.

The BOM should maintain a tight monetary policy stance while standing ready to tighten further if risks of unanchored inflation expectations and significant second-round effects emerge. Strengthening the BOM’s operational and legal autonomy, forbidding quasi‑fiscal activities, and addressing its weak balance sheet are critical to enhancing its effectiveness and credibility.

Higher FX reserves and greater exchange rate flexibility would strengthen Mongolia’s resilience to external shocks. While GIR have increased markedly, they remain below adequacy thresholds. The BOM should continue pursuing opportunistic reserve accumulation when market conditions allow. The BOM should also gradually phase out its role as a structural provider of FX to the market and reduce its dominance in providing FX hedging instruments to banks by fostering the development of the domestic FX derivatives market.

The macroprudential framework needs further improvement. The BOM should strengthen the institutional separation between macroprudential and monetary policy, expand its macroprudential toolkit, and enhance coordination with the FRC. Incorporating pension-backed loans into the DSTI framework would help prevent excessive indebtedness among pensioners. Continued progress in risk-based supervision, alongside reforms to credit information, insolvency, and resolution frameworks, would further enhance financial sector resilience. The proposed increase in bank shareholder limits, together with allowing international financial institutions to invest in multiple banks, is welcome and could facilitate bank shareholder diversification.

Structural reforms remain essential to achieving sustainable and inclusive growth. Priorities include improving the business environment to support investment and attract FDI, strengthening governance and the rule of law, and moving toward a more diversified and private sector-led growth model. The revised Foreign Investment Law, amendments to the SOE Law and the Mineral Law, and the draft Whistleblower Law should be finalized and enacted promptly.

Mongolia’s Fuel Crisis Is a Demand Problem, Not Just a Supply One www.thediplomat.com

As Mongolians prepare for the back-to-school season while tourists prepare for long road trips, the transportation sector is in limbo. Long lines of cars wait for hours for fuel, sometimes to find no fuel at all. The government was forced to impose restrictions on fuel sales by limiting the maximum amount that can be purchased on select days. 
The cause of the crisis can be attributed to both external geopolitical factors and internal country dynamics, highlighting Mongolia’s ongoing energy insecurity. The cure might be a path toward transportation electrification.
While Mongolia has proven crude oil deposits, the country is solely dependent on imported fuel, with 97 percent of it coming from Russia. The war in Ukraine and the conflict in the Middle East are creating instability in global energy systems, which could impact the supply side. However, despite the popular notion of delays in Russian fuel shipments to Mongolia, sources have not cited any “major” delays from Russia, which makes it harder to pinpoint the cause of the current situation. 
Internally, urbanization and a mining boom in Mongolia have pushed demand higher, by up to 14 percent annually. For instance, Mongolia imported roughly 500,000 tonnes of petrol and diesel fuel in 2005; however, this number jumped five times higher within 20 years, reaching close to 2.7 million tonnes in 2025.   
The strategic vulnerability caused by Mongolia’s fuel dependency is a well-established fact within energy security calculus. The government has been pursuing a diversification plan, including talks with Kazakhstan on fuel imports and, more recently, with South Korea. Last week, Mongolian Minister of Industry and Mineral Resources Damdinnyam Gongor was in South Korea, striking deals on petroleum products. The country is expected to receive the first batch of diesel, petroleum, and aviation fuel from South Korea as soon as this month, according to the Government of Mongolia’s social media page. However, this strategy of diversification does not address the fundamental question of Mongolia’s dependency on fuel imports.
As of August 5, the average reserve for petrol (AI-92 and AI-95) ranged from 11 to 13 days. The diesel reserve was enough for 18 days, and aviation fuel stood at 10 days, further showcasing the country’s unpreparedness for major fuel disruption. While previous governments aimed to secure and maintain three to six months of fuel reserve, a lack of proper infrastructure and implementation caused this target to be repeatedly missed. The current government vowed to expedite the reserve infrastructure, but it will not be operational until 2028.
Furthermore, the spike in global energy prices is likely to weigh heavily on average consumers and the state budget alike. In 2025, diesel and petrol alone accounted for roughly one-third of all imported products by value in Mongolia, and that’s was with discounted Russian fuel. Other fuel sources, including ones from China, could be economically challenging.
With a record high number of foreigners visiting Mongolia this summer, the current fuel shortages not only affect Mongolians. Many tourists are seeing disruptions to planned trips. On August 4, the U.S. Embassy in Mongolia advised Americans to delay or defer any non-essential travel to the country, citing the fuel shortage. This is a significant and unfortunate message to the rest of the world, as Mongolia has prioritized tourism as one of its key priority areas for economic diversification. Summer months are the peak season for tourists, and according to industry experts, the ongoing fuel shortage is forcing the tourism sector to stand still while undermining economic activity.  
While the government has been issuing press releases with its policy responses, there is one interesting point missing thus far: transportation electrification. While the policymakers seem to recognize the risk of fuel dependency, replacing one source of imports with another source (diversification) will not change the end calculus. Yes, the continued establishment of Mongolia’s first oil refinery is underway and is expected to be operational by 2028. However, Mongolia’s long-term energy strategy must move toward electrification and renewable energy expansion. 
There is a quiet but visible presence of electric cars in the streets of Ulaanbaatar. With their bright green license plates, they roam without “day restrictions” (conventional vehicles are required by law not to operate one day a week in an effort to curb Ulaanbaatar’s infamous traffic). Big Chinese EV producers like BYD are slowly establishing their dealerships in Mongolia’s capital city, perhaps waiting for the government to prioritize transportation electrification.
While almost every part of the global economy suffers from an energy crisis, including Mongolia, the country has the opportunity to craft a substantial long-term energy security policy that includes transportation electrification. Fuel as a whole accounts for the largest import commodity by value in the country; Mongolia’s untapped renewable energy capacity could point to a different future for its transportation needs.

AI-92 Petrol Imports from Russia Continue www.montsame.mn

AI-92 petrol imports from Russia are continuing, with 43 rail tank cars, or 2,580 tonnes, of AI-92 petrol entering through the Sukhbaatar border port on August 5 and an additional seven rail tank cars, or 420 tonnes, clearing the border on August 6.

The imported fuel is currently being transported to Tolgoit, Arshaant, Darkhan, Erdenet, and Ulaanbaatar railway stations, where it is being unloaded for distribution to gas stations.

Fuel imports from Russia are still coming into the country without interruption, according to the Ministry of Industry and Mineral Resources. A total of 10,017 tonnes of AI-92 petrol entered the country through the Sukhbaatar border port between August 1 and August 5.

Furthermore, 33 rail tank cars carrying 1,980 tonnes of AI-92 petrol, dispatched from Russia’s Angarsk Oil Refinery on August 2, are scheduled to be delivered to Mongolia.

Regulation Approved for Single-Source Procurement of Essential Pharmaceuticals www.montsame.mn

The Cabinet has approved the regulation on the "Single-Source Procurement of Pharmaceuticals, Medical Devices, Biological Products, and Vaccines."

By sourcing 16 essential strategic pharmaceuticals as well as four types of anti-hemophilic recombinant Factor VIII and Factor IX products directly from international manufacturers recognized by the World Health Organization (WHO) and international health bodies, the state budget achieved a cost savings of MNT 3.15 billion, yielding a procurement efficiency gain of 10+1%.

Centralized procurement is a widely adopted global model, utilized on a national scale in countries such as South Korea, Japan, Singapore, and New Zealand. The primary advantages of single-source procurement include securing volume-based wholesale discounts, reducing public expenditure, obtaining medications at fair prices from WHO-regulated stringently controlled facilities, and ensuring an uninterrupted supply of critical drugs subject to shortages.

Most importantly, this mechanism fully safeguards against the risks of substandard and counterfeit pharmaceuticals while mitigating price inflation, thereby helping relieve financial burdens on citizens.

Government Imposes Austerity Measures Across All Levels www.montsame.mn

 During its regular session on August 5, the Cabinet has approved a resolution ordering fiscal discipline, budget prioritization, and fund management across government organizations.

Under the resolution, key social and operational expenses will remain fully funded. These include civil service salaries, one-time retirement benefits, local allowances, pensions, child money allowances, and all social welfare programs.

Additionally, funding will proceed as normal for operational repairs and costs for schools and educational institutions, government internet and utility bills, law enforcement and security force transportation, fuel, domestic travel, meal allowances, and uniform expenses. Expenses related to the COP17 international conference, government debt payments, and local emergency reserves will also be maintained.

However, the government has banned non-essential conferences, anniversaries, public celebrations, and cultural events unless privately funded. Foreign travel—excluding pre-approved high-level visits—guest receptions, non-essential equipment purchases, non-military training, public relations media spending, and non-mandatory bonuses are also prohibited.

The austerity period will remain in effect through December 31, 2026.

Prime Minister Uchral Nyam-Osor clarified that the health sector is exempt from the restrictions. Essential health initiatives, including early screening for students, vaccinations, and seasonal flu prevention, will proceed as scheduled.

All chief budget governors have been directed to cut operating expenses by 20% within their departments. Additional mandates include freezing new hiring, canceling team-building trips, prohibiting new government positions, conserving power and heating, transitioning meetings online, and allowing remote work on select days.

The restrictions will be gradually eased once fiscal discipline improves and conditions normalize.

Z.Mendsaikhan: 2026 budget amendment to be submitted together with the 2027 budget draft www,gogo.mn

The Cabinet discussed budget savings, food supply, and improvements to the registration and monitoring system at its regular meeting today. Finance Minister Z.Mendsaikhan briefed the media on the decisions made.

According to the Minister, the Government has officially switched to austerity mode and approved a resolution to prioritize public spending.

The budget financing will be prioritized in three stages: First, funding will be fully secured for the salaries and pensions of civil servants, special government agencies, and operating expenses for hospitals and the education sector. Second, funding will be provided for essential government-approved events and activities. Third, all expenditures that can be postponed or reduced over the longer term will be subject to savings measures.

State budget revenue reached MNT 14.6 trillion in the first half of 2026, while expenditure totaled MNT 16.7 trillion, resulting in a preliminary balanced budget deficit of MNT 2.1 trillion.

Without expenditure controls, the government could face difficulties financing salaries, pensions, and other essential state obligations by the end of the year.

The budget deficit was caused by several factors, including: approximately MNT 1 trillion in tax revenue that would normally have been collected in 2026 being collected in advance during 2025. An additional MNT 820 billion allocated in May to eliminate salary disparities for teachers and healthcare workers.

As part of the austerity measures, government agencies will postpone anniversary celebrations and non-essential events while reducing operating expenses wherever possible.

The 2026 budget amendment will primarily include funding for the salary increases granted to teachers and healthcare workers, as well as additional financing needed to establish strategic food reserves. The amended budget will be submitted to Parliament in September together with the draft 2027 State Budget.

The government also plans to strengthen Mongolia's food security by improving the registration system for meat reserves. This autumn, the electronic registration system of the Agricultural Exchange will be integrated with the capital city's system to improve transparency and oversight.

Additional support measures will include: Reduced electricity tariffs for businesses operating food warehouses and cold storage facilities. Preferential loans for companies investing in standard-compliant storage facilities. A transparent electronic system to monitor meat procurement and reserve inventories.

The new system will:

Increase transparency in meat procurement and reserve management.

Prevent the misuse of concessional loans intended for reserve storage.

Improve market competition and accessibility.

Allow consumers to purchase meat directly from warehouses and processing facilities.

Enable herders to sell directly to end consumers through the electronic platform.

Improve the preparation and management of state meat reserves, reducing market uncertainty.

He added that the budget amendment will also include funding for electricity tariff discounts and concessional financing to expand standard food storage infrastructure.

N.Uchral: All conferences, forums, and meetings to be canceled www.gogo.mn

Prime Minister N.Uchral announced that the government is introducing austerity measures at all levels in response to the global geopolitical situation and growing international uncertainty.

As part of the decision, certain government expenditures and funding will be suspended.

“All events, including regional conferences, sectoral conferences, forums, and meetings, will be canceled. No official overseas travel will be permitted without government approval.

Any essential meetings or conferences should be held online whenever possible. The budget saved through these measures will be redirected toward winter preparedness, energy and fuel supplies, and other essential activities that directly support the lives and well-being of citizens”, the Prime Minister said.

G.Damdinnyam: We are buying fuel wherever it is available, prioritizing supply over price www.gogo.mn

The Government presented the decisions made during its regular Cabinet meeting, including measures being implemented by the Rapid Response Headquarters to stabilize the country's fuel supply.

As part of the emergency measures, fuel is currently being sold under an even-odd license plate system, with purchases limited to MNT 50,000 per vehicle. The government has also temporarily prohibited the sale of fuel in containers.

Minister of Industry and Mineral Resources G.Damdinnyam said the first day of the new system had produced positive results.

“The government is working to diversify fuel import sources and increase import volumes. People are asking how Mongolia will import fuel from the Republic of Korea. We already purchase fuel from South Korea and Singapore. The issue is not where we buy it, but increasing the volume. We are buying fuel wherever it is available. Our priority is securing supply rather than focusing on price or tariffs.

Mongolia normally consumes around 2,000 tons of gasoline per day, but daily consumption has risen to 3,000–4,000 tons due to public concern and panic buying. Also, the construction of new strategic fuel storage facilities has begun.

Mongolia currently has storage capacity for only about one month's worth of fuel. By this time next year, we expect to have reserves sufficient for two months, and by 2028, we aim to build reserves covering three months of consumption," he said.

To help stabilize prices and prevent supply disruptions, the government has also exempted all fuel and petroleum products from import customs duties.

Under the Cabinet resolution "Measures to prevent shortages of gasoline", the government has decided to:

Ensure the prompt import, transportation, and unloading of petroleum products and all types of fuel at border crossings.
Set the import customs duty on all petroleum products and fuels at zero percent until February 1, 2027.

Reduce fees for the use of foreign railway tank cars.

Expedite the approval of permit applications that meet all legal requirements.

Remove administrative obstacles affecting the import of raw materials required for petroleum product production.

Instruct the relevant Ministers to ensure a stable national fuel supply.