Parliament’s Standing Committee on Economics recently formed a working group to study the reasons behind a recent spike in gasoline prices and the falling rate of the tugrik against the U.S. dollar. The working group has concluded that Mongol Bank is at least partly to blame for the situation. Our correspondent spoke with Mongol Bank Vice President N.Zoljargal about the group’s findings.

Q: What is Mongol Bank’s reaction to the working group’s findings?

A: Mongol Bank has given many files with research materials and information about the situation. These contain definite information.

Q: But the head of the working group said that Mongol Bank has suffered losses of between MNT 150 billion and MNT 200 billion. What about that?

A: We say Mongol Bank’s losses are due to changing currency rates. That is why Mongol Bank had losses in 2010 and 2011. But bank officials have previously informed the Government about it, and have sent an official statement about it. Mongol Bank has not set currency rates to regulate gains and losses. This is a different thing.

Q: What measures has the bank implemented to stabilize currency rates recently?

A: The exchange rate is a main economic indicator and it is not proper to give figures. Some countries have a strong monetary policy, and Mongol Bank has a strong policy with a floating exchange rate. Parliament instructs it in its monetary policy. Rising gasoline prices influence consumer goods prices. Mongol Bank has taken measures to stabilize the exchange rate, and it has stabilized over the past ten days, and now Mongol Bank can intervene less. Because, the bank’s participation in manipulating exchange rates in normal conditions is not a good policy or practice.

Q: Petroleum importers said rising gas prices were due to the exchange rate. What about that?

A: Currency rates depend on export and import conditions and other factors. If the exchange rate is too strong, that will have a negative influence on manufacturers in Mongolia. In this case, imports will increase. We should talk with detailed accounting and research from all sides, and we should regulate the exchange rate according to the market’s demands.