Citizens call for transferring USD loans to MNT


On Monday, citizens T.Bayarkhuu, Ts.Shinebayar and G.Ganbat announced that they have initiated the 218.1 Movement to address the concerns of people and entities that took out loans in USD and are now seeing great losses due to drastic increases to the USD exchange rate.
Provision No. 218.1 of the Civil Law states that if currency rates appreciate or depreciate before a payment is due, the payment shall be adjusted to the currency rate set when the loan agreement was signed. The 218.1 Movement believes that because this provision is not being implemented, people and entities that took out loans in USD are seeing significant losses.
Citizen T.Bayarkhuu said, “Several years ago, the USD exchange rate stood at around 1,400 MNT. Even though a person took out a 20,000 USD (28 million MNT) loan a few years ago, and is still consistently repaying their debt, it is now an approximately 40 million MNT debt due to exchange rate discrepancies. This is directly impacted by the USD exchange rate increase, because the USD exchange rate equals over 2,050 MNT now. The provision of the Civil Law is not being implemented.”
The movement’s initiators have submitted a letter to President Ts.Elbegdorj, Speaker of Parliament Z.Enkhbold, and Prime Minister Ch.Saikhanbileg calling for implementation of the provision and transferring the USD loans to MNT.
Their demand letter calls for the following actions:
-»Creating a working group from Mongol Bank, the Financial Regulatory Commission, Mongolian Bankers Association, Mongolian National Chamber of Commerce and Industry, Mongolian Employers Association, and representatives responsible for resolving the issue of transferring the USD loans to MNT loans in accordance with provision No. 218.1.
-»Mongol Bank and Mongolian Bankers Association should determine and approve the currency rate for transferring the USD loans to MNT loans at the rate that existed when the banks issued loans to borrowers.
-»Revising and renewing borrowers’ agreements with banks after transferring loans from USD to MNT according to the exchange rate approved by the working group.
The 218.7 Movement noted that the USD exchange rate shouldn’t exceed 1,470 MNT, which was the  rate approved in 2015 following the amendments to the Law on Excise Tax. They also demanded that the working group monitor implementation of the changes and issue a public report on their progress every week.

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Posted by on Mar 23 2016. Filed under Business & Economics. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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