Private entities request swap deals to stabilize FX rate www.zgm.mn
Yesterday, the Bank of Mongolia (BoM) received the representatives of Top 200 private entities to discuss the current business environment and economic situations. Participants addressed the necessity of swap agreements in coordination with currency volatility and corporate planning of private entities.
Deputy Governor of the BoM Lkhagvasuren Byadran stressed in his opening remarks that the bank is planning to annually organize the event and expand its scope as interrelations of wealth makers play an import part in actualizing state policies by preparing demand-driven policies. The meeting further touched upon the implementation of the 2018 Monetary Policy and economic challenges.
Myagmarjav Luvsandach, CEO of the MCS Coca-Cola LLC, remarked, “It is essential for the BoM to provide information on monetary policy, economic and financial situation for businesses, which are operating in an economy that is highly dependent from domestic and foreign environments, to be able to plan ahead,” and suggested to hold the meeting semi-annually before the cycle periods, such as the approval of monetary policy.
“Coordination between banks and financial institutions are necessary in the implementation of monetary policy. The State and government bodies need to regulate this,” recommended Khuyagtsogt Ognon, Deputy Director of Mongolian Stock Exchange (MSE), and highlighted that there are currently 220 firms listed at the MSE. “Over 180 entities have been delisted so far. The current financial and economic situations are the main reasons here. Furthermore, private entities are lacking transparency that leads to delisting,” noted Mr. Khuyagtsogt.
Regarding foreign exchange (FX) rate, Unenbat Baatar, Chief Financial Officer at MobiCom Corporation LLC, addressed, “Tech companies require high amount of investment in the short-term; however, the shrink in purchasing power of consumers is causing MNT-based operations to have FX costs. We need protection measures for national currency via flexible swap deals that are in line with corporate plans of private entities.” He then highlighted that political risks in businesses and economy stand at around 70 percent. Participants at the meeting shared the same view on political risks. Former Parliament member and current CEO of Economic research and Training Institute Demberel Sambuu warned that sudden announcement of the Parliament on economy and finance is affecting the stability of business and economy.
Published Date:2018-11-29