Cabinet approves a comprehensive package of pandemic response measures
On February 17, during its regular meeting, Cabinet approved a comprehensive, 10 trillion MNT package of economic and public health measures to overcome the COVID-19 pandemic, which will be implemented over the next three years. With the implementation of the plan, economic indicators are expected to reach 2019 levels.
The comprehensive plan includes the following measures:
- The government will offer 2 trillion MNT in low-cost loans (3 percent annual interest rate) for companies, employers, and small and medium-sized businesses that have been most affected by the pandemic.
- A scholarship of 500,000 MNT per student (with two-month terms) will be offered annually, which will require about 500 billion MNT in financing.
- The government will carry out the construction of the Youth I, II, and III apartment complex projects, which will cost 3 trillion MNT for the financing of subsidized mortgage loans.
- Implementation of projects and programs with strategic significance at a cost of 2 trillion MNT.
- In cooperation with select domestic banks and financial institutions, Central Bank’s repo financing will be increased from 1 trillion MNT to 2 trillion MNT per year. A government program (valued at 500 billion MNT) has been approved to provide interest incentives to agricultural borrowers and 3 trillion MNT in loans for non-mining, export-oriented manufacturers.
- Prime Minister L.Oyun-Erdene warned against rising inflation and called for the prevention of a rise in the prices of consumer goods and fuel during the implementation of the plan. The Prime Minister stated that the government will not increase the money supply, but will circulate 8 trillion MNT held by BOM treasury bills, bills with a maturity of up to four weeks that will be largely funded by commercial banks.
- Cabinet also gave state and regional organizations instructions to shift to an austerity mode, and suggested various ways to cut expenses and increase efficiency.