There was criticism of both the
Government and the Central Bank at a recent meeting of the Standing Committee
on the Budget when it discussed the status of foreign loans. When Finance
Minister S.Bayartsogt said serious talks on a USD30-billion loan from the
Chinese Government would begin only after Mongolia had set up a development
bank, N.Batbayar wondered how a bank that is yet to be established can hold up
negotiations on an urgent loan. He cautioned the Government against keeping
Parliament in the dark, recalling that the decision to set up the State Bank
was taken administratively, and no permission from Parliament was sought on
such an important issue. Some MPs also wanted to know why the Central Bank
places its foreign exchange reserves overseas in accounts that pay 2% interest
while it is saying it wants to borrow from abroad and pay 4% interest.