The Bank of Mongolia officially reported on its gold purchases. In September, the Bank purchased 2.1 tons of gold. As a result, the Central Bank on Mongolia has purchased 14.3 tons gold in the first nine months of this year. However, gold purchases of the bank decreased by 378 kg comparing to the same period of the previous year.

In order to increase gold submitting, the Bank of Mongolia is requesting to extend the gold tax deduction period. It has a plan to reach foreign exchange reserves to USD 6.5 billion.

As of July, foreign exchange reserves of Mongolia have reached USD 2.9 billion. This amount can meet the need for 5.2 months of imported goods and services.

The Central Bank emphasizes that Mongolia’s foreign exchange reserves are less than 43 percent lower than the national security concept, and 10.4 percentage points lower than the international benchmark. In other words, it is not enough to compensate short-term debt. One of the key areas for enhancing official foreign exchange reserves is to increase the gold purchases of the Central Bank.

This year the Central bank plans to purchase 22 tons of gold. As a result, the foreign exchange reserves could be increased to USD 700-800 million.

The Bank reported that it will open local specimen laboratories in Darkhan-Uul and Bayankhongor provinces in October. As a result, gold manufacturers can sell their gold using the central bank’s prices on that day. Initial investment needed to establish these laboratories is accounted for MNT 793.8 million. Of which, MNT 694 million will be spent on equipment.

The central bank is buying gold from citizens and business entities at a price of the London Metal Exchange. Gold spot price fell 10 percent to USD 1,183 since the beginning of the year.

Source: BloombergTv.mn