The International Monetary Fund (IMF), World Bank, Asian Development Bank (ADB), Japan, Korea and the People’s Bank of China (PBoC) launched the rescue effort on May 24.

The IMF agreed to disburse around $434 million in funding as part of a three-year programme, while the World Bank, ADB, Japan and Korea also contributed budgetary support, bringing the total financing package to around $5.5 billion. The PBoC agreed to extend a swap arrangement with the Bank of Mongolia.

“The authorities’ programme aims to stabilise the economy, restore confidence, and pave the way to economic recovery,” the IMF said in a statement.

Growth in Mongolia rocketed after 2010, driven by high commodity prices and a mining boom financed in large part by investment from China. The economy became the fastest growing in the world, with GDP growth peaking at 17.3% in 2011.

Since then, falling commodity prices and a slowdown in the Chinese economy have left the economy battered and the government’s budget, which ballooned during the boom, looking seriously overstretched. Growth was just 1% in 2016.

IMF deputy managing director Mitsuhiro Furusawa says fiscal consolidation is a “critical element” of the programme. The IMF is urging the creation of an independent fiscal council and implementation of a “sizeable” fiscal adjustment, targeted to limit the impact on the most vulnerable people.

The government is also working on a new central bank law, which is “envisaged to strengthen the governance and independence of the Bank of Mongolia,” Furusawa says.

The programme aims to lend support to the banking sector, improve the supervisory and regulatory framework, and strengthen anti-money laundering rules. Structural reforms are pitched at improving the “business environment” and helping the economy diversify away from the minerals sector.

The ADB said the outlook for Mongolia is improving, forecasting growth of 2.5% in 2017 and 2% in 2018 as large mining investments come online. “Strengthening the management of natural resources revenue remains a major challenge,” the organisation said in a report in April.

Fitch, the ratings agency, says the financing arrangement should put the economy on a “more stable footing”, though it notes there will be challenges in hitting budget targets, and medium-term debt sustainability is still contingent on the success of the mining projects. Mongolia’s current rating is B– with a stable outlook.

“The support package and stronger market confidence should ensure that Mongolia can meet its external obligations over the next few years, and should support greater stability of the Mongolian tugrik,” Fitch said in a statement on May 28.