DRAFT AMENDMENT TO LAW ON CURRENCY SETTLEMENTS DISCUSSED BY THE STATE GREAT KHURAL
At its plenary meeting today, the State Great Khural discussed a draft amendment to the Law of Mongolia on Currency Settlements, initiated by President of Mongolia Khaltmaagiin Battulga. As majority of the Members did not approve of the bill during the discussion, the State Great Khural resolved to return the draft amendment to the Law on Currency Settlements and the accompanying documents to the initiator.
The President had proposed the following amendments:
In the Law on Currency Settlements:
“10. The Bank of Mongolia will be allowed to register the transaction account of a legal entity, which established an investment contract with the Government, exploits a mineral deposit of strategic importance, and with foreign exchange earnings in the minimum amount set by the Bank of Mongolia.”
In the Law on Central Bank (Bank of Mongolia):
“6/ to register the account of a legal entity under certain conditions, and carry out transactions in the cases specified by the law”
In accordance with the currently effective Law on Currency Settlements and the Law on Central Bank, the Bank of Mongolia regulates currency circulation, and holds and manages the foreign exchange reserves. However, according to the bill initiator, the rationale for drafting the amendment was the fact that the Bank of Mongolia has no authority to negotiate with a legal entity earning a large amount of foreign currencies, except for buying currencies.
Furthermore, the amendment to the Law on Currency Settlements was drafted with the purpose of creating legal arrangements for the Bank of Mongolia to ensure the stability of national currency, hold and manage the foreign exchange reserves, and carry out the cash transactions and settlements of a legal entity with currency earnings from the exploitation of a mineral deposit of strategic importance, in frames of its duty to increase the foreign exchange reserves of Mongolia.