Ulan Bator, April 12 (IANS): Mongolian commercial banks have imposed limits on foreign exchange transactions amid the country’s dwindling foreign exchange reserves due to the Covid-19 pandemic and the ongoing conflict between Russia and Ukraine.
Mongolia’s foreign exchange reserves fell to $3.3 billion on Tuesday, down $1.2 billion from the end of 2021, said Atarbaatar Enkhjin, head of the reserve and currency management department. financial markets of the Bank of Mongolia, in a press release.
The decline in foreign exchange reserves is likely the result of a 40% increase in imports since the start of 2021, and Covid-19 restrictions have prevented the country from exporting much of its coal, its main commodity. export, despite high coal prices. raw materials on the world market.
“Furthermore, due to the situation between Russia and Ukraine which started at the end of February, the uncertainty of the external environment is deteriorating beyond our expectations. As a result, there is some pressure on the foreign exchange reserves and the exchange rate of the Mongolian Tugriks,” Enkhjin said.
Mongolia’s foreign exchange reserves stood at $4.9 billion at the end of April 2021, hitting a record high, according to the central bank.
Since the start of the conflict between Russia and Ukraine on February 24, Mongolian commercial banks have begun to impose unexpected limitations on the daily volume of dollar transactions, the Xinhua news agency reported.
The central bank explained that the limitation on US dollar transactions was not imposed by the Bank of Mongolia but by the commercial banks themselves due to the lack of currency supply in the market.
In March, a daily limit of 50 million Mongolian tugriks (about $16,550) was imposed on foreign currency transactions for individuals. The amount then dropped sharply to 30 million and continued to drop to the current limit of 300,000 tugriks (about $99.3).