Finance Minister explains bond sales

Following a demand from S.Byambatsogt in Parliament on Friday, Minister of Finance S. Bayartsogt said the Government has sold bonds worth MNT1 trillion and 720.7 billion since 2002. Until 2006, the aim was to raise money, but from 2007 the imperative shifted to plugging the budget deficit. Bonds for MNT270 billion were offered in 2009. Another MNT60 billion worth of bonds was sold to raise money to implement the 4000 Apartments program, to prop up both the construction and the banking sector.

Another series of bonds worth MNT75 billion was sold to support gold mining companies, on the suggestion of the Central Bank which was worried about the fall in value of the MNT. The bond sales were also meant to meet the terms of the Stand-by program with the International Monetary Fund. The Minister claimed the bond sale for apartments has served its purpose but has not been similarly successful in some other instances. Bonds worth MNT170 billion were sold to pump money into Anod Bank. The Mongol Bank President had promised that sale of collaterals for unpaid loans will be used to repay the bond holders but it has not worked out that way. Tax payers will now bear the costs of the bank going onto liquidation.