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January News HighlightsMONGOLIAN PM SURVIVES NO-CONFIDENCE VOTE OVER ECONOMIC POLICIES

Mongolian Prime Minister Saikhanbileg Chimed has survived a no confidence vote over his handling of the economy, setting him up to rule through summer elections. Forty-two lawmakers in the 76-seat Great Hural voted in support of Mr Saikhanbileg, with 31 against. A five-hour debate concluded in the early hours of Friday, Jan 29. The vote results are a “major boost for political stability until 2016 elections, de-risking Mongolia in this sense,’’ Dale Choi, founder of Mongolian Metals & Mining, said in an e-mailed statement. “OT underground is safe now from political interference, until elections bring an additional four years of clarity.’’ (Source: The Straits Times)

MONGOL BANK CUTS POLICY RATE TO 12 PERCENT

The Bank of Mongolia has cut the policy rate by one point to 12 percent effective on 14 January. The rate cut follows annual inflation for November 2015 tallying at 2.9 percent. “Positive and stable outlook on foreign direct investment and its recovery in the medium-term shall support macroeconomic external balance,” said the Monetary Policy Committee in a 13 January statement. “This decision on cautious and gradual monetary easing shall positively affect promoting monetary and credit growth, private sector investment and economic activities.”. (Source: Bank of Mongolia)

AUSTRALIA APPOINTS FIRST RESIDENT AMBASSADOR

Australia’s first resident ambassador to Mongolia has been appointed to its new embassy, which launches this year. “Today I announce the opening of the Australian Embassy in Mongolia and the appointment of Mr John Langtry as Australia’s first resident Ambassador to Mongolia,” said Australian Foreign Affairs Minister Julie Bishop in a 22 December statement. Langtry is a senior career officer with the Department of Foreign Affairs and Trade. He was most recently assistant secretary of the northeast Asia branch. (Source: Department of Foreign Affairs and Trade (Australia))

INFLATION TO FALL TO 1% BY 2016, SAYS MONGOL BANK

The Bank of Mongolia has put out the bold prediction that inflation will fall to 1 percent next year on the back of falling demand for consumer goods and slowed economic growth. Inflation clocked in at 2.9 percent nationwide for 2015, falling eight percentage points from the year before. The slowed growth in Mongolia that has resulted from China’s slowest growth in decades last year and a decline in key commodity goods is a key factor, said the Bank of Mongolia. (Source: UB Post)

PRINTING HOUSE TO BECOME “GALLERIA ULAANBAATAR”

Tavan Bogd Group has announced plans to establish a city museum piece of land acquired with a prime location just across from the Government Palace at auction amid some controversy. The new structure built there will not be any taller than the Government Palace; Tavan Bogd said the new building would attempt to repli-cate the old-fashioned look of the print house that once stood there while housing a flagship Gobi Cashmere store, bank, restaurants, a car showroom and clothing boutiques. He added that it would develop an 18-floor building directly behind the building, where there is additional land it owns. (Source: News.mn)

MORTGAGE PROGRAM RESTORED WITH PARLIAMENT’S APPROVAL OF AMENDMENT

Parliament has passed a bill that will allow the 8 percent mortgage plan to continue after a judge’s decision from the constitutional court put a halt to the program last month. Banks discontinued all mortgage lending after a judge declared the subsidized mortgage program rolled out in 2014 was in violation of the Law on Immovable Properties. The amendment, which passed with 86 percent approval by Parliament, puts out measures to mitigate risk in credit repayment and delays in repayment, thereby resolving the judge’s issues with the program. (Source: Montsame)

Mongolia Growth Group January 2016 Economic Update

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-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

09.01.02

09.03.02

09.05.02

09.07.02

09.09.02

09.11.02

10.01.02

10.03.02

10.05.02

10.07.02

10.09.02

10.11.02

11.01.02

11.03.02

11.05.02

11.07.02

11.09.02

11.11.02

12.01.02

12.03.02

12.05.02

12.07.02

12.09.02

12.11.02

13.01.02

13.03.02

13.05.02

13.07.02

13.09.02

13.11.02

14.01.02

14.03.02

14.05.02

14.07.02

14.09.02

14.11.02

15.01.02

15.03.02

15.05.02

15.07.02

15.09.02

15.11.02

16.01.02

-

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

1 USD 2,011.4₮ 1 EUR 2,192.1₮ 1 CNY 305.9₮ 1 GBP 2,891.0₮ 1 RUB 26.7₮ 1 CAD 1,438.6₮

MONGOLIAN TUGRIK VS US DOLLAR

MONGOLIAN STOCK EXCHANGE CHART

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

Ulaanbaatar (0.2) 1.1 1.1

Mongolia (0.2) 1.9 1.9

MONETARY INDICATORS: 2015/Dec bln ₮ YOY %Reserve money 2,459.6 (28.2%)M2 Money 10,050.2 (5.5%)

mln USD Dec 2015 Dec 2014 Change %

Exports 426.6 584.2 (27.0%)

Imports 302.5 404.4 (25.2%)

Net exports 124.1 179.8 --

EXTERNAL SECTOR

Nov 30 Nov 30 MONTHLY CHANGE MSE TOP 20 INDEX 12,763.89 12,489.58 2.19%Market Cap (USD) 632,669,093 629,578,461 0.49%

OFFICIAL EXCHANGE RATES*: 01/31/2016

January 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

2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

-

INTEREST RATES 2015/DecPolicy rate 13.0%Overnight repo 15.0%Overnight deposit 11.0%Repo 13.5%

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

MSE TOP 20 INDEX

*January numbers are not available until mid-February Source: National Statistics Office

*January numbers are not available until mid-February

*January numbers are not available until mid-February

*Mongol Bank