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Bank of Mongolia is preparing to submit proposed amendments to the Law on Currency Settlements to Parliament. The amendments aim to make the currency market more transparent and closer to internationals standards.
A discussion on the draft amendments was held by the Bank of Mongolia today. This would be the 20th amendment to the law since its introduction in 1994.
Amendments are expected to hit over half of the current provisions of the law and reform subjects such as currency management, currency market management to reduce the exchange rate risk, increasing access to financial derivatives, establishment of an international currency exchange, improving communication between government agencies as to currency regulation.
Several Mongolian Financial institutions and key regulators sent representatives to the discussion on the draft law.
The Mongolian Bankers Association provided a proposal for the amendments that included removing state involvement from the inbound and outbound flow of currency, however, the law would still obligate the government to take measures to stabilize currency exchange rates.
The Mongolian Economic Analysis and Research Center believes that this proposed provision could help Cabinet maintain a proper level of government debt, thereby impacting currency stabilization. A more stable currency could be a major factor in attracting more foreign investment into Mongolia.