65.1 percent of those debts or MNT 2 trillion are held by business entities and 35 percent or MNT 546 billion are taken out by individuals. In addition, MNT 195 billion of principal payments and MNT 72 billion of interest payments out of the debt service payments due have not been made.

The central bank has been taking necessary measures to alleviate the impacts of the pandemic on the country’s banking and financial areas in line with best practices from world countries and local legislation.

On March 11, the central bank’s Monetary Policy Committee decreased the policy rate by 1 percentage point to 10 percent, lowered the reserve requirement on banks’ liabilities in togrog by 2 percentage points to 8.5 percent, and changed the range of interest rate corridor to be +1, -1 percentage points from the policy rate.

The measure, aimed to ensure economic and financial stability while keeping the inflation rate around the target rate, was expected to relieve financing costs of banks, to support financial intermediation, and to stimulate economic growth by considering the current macroeconomic and financial outlook and its prospects, main driving factors, and uncertainties and risks in the domestic and external environment.

As a result of steps taken by the central bank, interest rates by commercial bank loans are expected to go down by one percentage point and new loans totaling MNT 300-400 billion will become available for borrowers.

Upon the government's recent decision to make deferrals on consumer and business loan repayment and their interests for three months, several temporary changes were made to regulations followed by the commercial banks on their asset classifications and requirements for their operations, allowing the banks not to change their borrowers’ credit ratings caused by failures on loan repayment.

Moreover, the appropriate liquidity ratio for commercial banks was reduced to 20 percent from original 25 percent, helping them to improve their financial capacities.

Since the government’s decision on loan repayment postponement was made, commercial banks have deferred loan repayments of 1,069 individual borrowers amounting to MNT 36.6 billion and of 126 companies totaling MNT 409.8 billion, reports the central bank.

L.Nandintsetseg