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April News HighlightsINDIA’S EXIM BANK EXTENDS $1 BN CREDIT TO MONGOLIA

The Exim Bank of India has extended a line of credit (LoC) worth USD1 billion to Mongolia for developing its railways and related infrastructure. This is India’s second LoC to Mongolia, taking the total value of LoCs to USD1.02 billion. With this LoC, the Exim Bank has in place 204 LoCs covering 63 countries in Africa, Asia, Latin America, the Oceania and the CIS, totaling credit commitments of over USD 15.28 billion, available for financing exports from the country. Under these LoCs, Exim Bank will reimburse 100 percent of the contract value to the Indian exporters, upfront on the shipment of equipment and goods and provision of services. (Source: Economic Times, India Times)

IMF FORECASTS 0.4% ECONOMIC GROWTH IN 2016

The International Monetary Fund (IMF) is forecasting 0.4 percent economic growth for this year, which would make it the fifth straight year of slowing growth under the Democrat’s rule of government. Analysts say the sluggish growth is a reflection of the global fall in mining products’ prices. This IMF estimate falls slightly below the recent World Bank’s forecast of 0.8 percent. (Source: News.mn)

S&P AFFIRMED SOVEREIGN RATING AT ‘B/B’; OUTLOOK STABLE

Standard & Poor’s Ratings Services affirmed its ‘B’ long-term and ‘B’ short-term sovereign credit ratings on Mongolia on 28 April; the outlook is stable. Mongolia’s economic outlook remains weak, with Standard & Poor’s Investor Services’ projection for GDP growth averaging 4.6 percent over 2016-2019. The stable outlook balances the country’s low-income resource-driven economy, emerging policy environment and fis-cal performance, high external risk, and limited monetary flexibility with the prospect that large mining projects could quickly reverse Mongolia’s sovereign credit profile during the next 12 months. (Source: Standard & Poor’s)

GATSUURT DEAL SET FOR FINALIZATION IN SPRING

Centerra Gold Inc. will be able to close a deal for the Gatsuurt gold project before the end of spring, said the mining minister in the prime minister’s regular press conference. Government is set to take a 34 percent stake in the mine and take in USD432.3 million a year over nine years in taxes and fees paid from Gatsuurt. Mining Minister Rentsendoo Jigjid said he expected the deal to be finalized soon during its quarterly press conference focused on increasing transparency within the mining sector. (Source: Daily News)

DEVELOPMENT BANK INKS OIL LOAN AGREEMENT WITH RUSSIA’S VTB

The Development Bank of Mongolia concluded a commercial financing contract with Russia’s VTB Bank on 20 April for USD300 million in oil products from Russia. (Source: News.mn)

TURKISH ENGINEERING FIRM LAUNCHES CONSTRUCTION OF HYDRO PLANT

Drilling has begun for the construction of a new hydro-electric plant in western Mongolia by Turkey’s ZTM Engineering and Consulting Co. Inc. The engineering firm plans to spend USD248 million on the 92.8 megawatt power plant being built along the Khovd River in Nogoonnuur Soum, Bayan-Ulgii Aimag. A concession agreement is already in place where ZTM has agreed to build and run the facility for a set number of years before handing over ownership to the government. (Source: News.mn)

Mongolia Growth Group April 2016 Economic Update

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-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

09.01.06

09.03.06

09.05.06

09.07.06

09.09.06

09.11.06

10.01.06

10.03.06

10.05.06

10.07.06

10.09.06

10.11.06

11.01.06

11.03.06

11.05.06

11.07.06

11.09.06

11.11.06

12.01.06

12.03.06

12.05.06

12.07.06

12.09.06

12.11.06

13.01.06

13.03.06

13.05.06

13.07.06

13.09.06

13.11.06

14.01.06

14.03.06

14.05.06

14.07.06

14.09.06

14.11.06

15.01.06

15.03.06

15.05.06

15.07.06

15.09.06

15.11.06

16.01.06

16.03.06

1 USD 2,011.8₮ 1 EUR 2,290.8₮ 1 CNY 310.5₮ 1 GBP 2,944.1₮ 1 RUB 31.2₮ 1 CAD 1,606.4₮

MONGOLIAN TUGRIK VS US DOLLAR

MONGOLIAN STOCK EXCHANGE CHART

CONSUMER PRICE INDICES: 2015/Mar CPI March Month YTD YOY

Ulaanbaatar 0.3 1.5 1.1

Mongolia 0.5 1.7 1.7

MONETARY INDICATORS: 2015/Mar bln ₮ YOY %Reserve money 2,360.7 (4.4%)M2 Money 10,113.7 2.1%

mln USD Mar 2016 Mar 2015 Change %

Exports 345.7 324.5 6.5%

Imports 247.0 239.3 3.2%

Net exports 98.7 85.2 --

EXTERNAL SECTOR

Feb 29 Jan 29 MONTHLY CHANGE MSE TOP 20 INDEX 10,899.99 12,004.45 (9.2%)Market Cap (USD) 635,153,944 711,500,000 (10.7%)

OFFICIAL EXCHANGE RATES*: 04/30/2016

April 2016 - Economic Update

Jan

- 09

May

- 09

Sep

- 09

Jan

- 10

May

-10

Sep

- 10

Jan

- 11

May

- 11

Sep

- 11

Jan

- 12

May

-12

Sep

- 12

Jan

- 13

May

- 13

Sep

- 13

Jan

- 14

May

- 14

Sep-

14

Jan-

15

May

- 15

Sep-

15

Jan-

16

Apr-

16

2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

-

INTEREST RATES 2015/MarPolicy rate 12.0%Overnight repo 14.0%Overnight deposit 10.0%Repo 12.5%

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep-

09

Nov

-09

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep-

10

Nov

-10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep-

11

Nov

-11

Jan-

12

Mar

-12

May

-12

Jul-1

2

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-1

3

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

June

-14

Sep-

14

Nov

-14

Jan-

15

Mar

-15

May

-15

Jul-1

5

Sep-

15

Nov

-15

Jan-

16

Apr-

16

MSE TOP 20 INDEX

*April numbers are not available until mid-May Source: National Statistics Office

*April numbers are not available until mid-May

*April numbers are not available until mid-May

*Mongol Bank

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Jan-09

Mar-09

May-09

Jul-0

9

Sep-09

Nov-09

Jan-10

Mar-10

May-10

Jul-1

0

Sep-10

Nov-10

Jan-11

Mar-11

May-11

Jul-1

1

Sep-11

Nov-11

Jan-12

Mar-12

May-12

Jul-1

2

Sep-12

Nov-12

Jan-13

Mar-13

May-13

Jul-1

3

Sep-13

Nov-13

Jan-14

Mar-14

May-14

Jul-1

4

Sep-14

Nov-14

Jan-15

Mar-15

May-15

Jul-1

5

Sep-15

Nov-15

Jan-16

Mar-16