The Bank of Mongolia is aiming to increase its gold purchases by 10 percent to 22 tons in 2018. Foreign exchange reserves will reach USD 700 million, if the BoM gold purchases reach 20 tons.

According to the Bank of Mongolia, gold purchases are increasing in recent years due to a fall in Mineral Royalty Tax to 2.5 percent. Tax deduction period ends in 2019. The BoM has submitted a proposal to extend this period for five years.

In order to increase gold selling to the BoM, it is buying gold at the world market price. The BoM is also establishing assaying laboratories in Bayankhongor and Darkhan-Uul provinces. However, the Bank of Mongolia emphasizes the need to address the reduction of illegal gold smuggling in cooperation with law enforcement agencies to increase gold reserves.

In the first eight months of 2018, law enforcement agencies stopped smuggling out 17.4 kg of gold and transferred it to the state revenue. According to statistics, since 2010, a total of 204.5 kg of gold was made to the state revenue for this reason. Within the framework of the "Gold-2" program, the Government targets to reach the gold mining to 25 tons by 2020. However, the Mineral Resources and Petroleum Department underlined that there are greater risks if the BoM does not reach its goal.

Source: BlommbergTv.mn