During the state visit of the President of Mongolia to China, the two countries agreed to extend the swap agreement between the Bank of Mongolia and the People’s Bank of China. The proposal to extend the agreement was put forward by Mongolia last February, and the proposal was confirmed during the President’s visit, and the Chinese side has expressed its readiness to extend the agreement.
The swap agreement between the two central banks is due to expire in July 2023. As a result, according to the regulations, Mongolia will be able to officially submit and confirm its request for the extension of the swap agreement in April of next year.
In 2011, a swap agreement was signed between the Bank of Mongolia and the People’s Bank of China to support trade and economic cooperation between the two countries. The contract was due to expire in 2014 and was extended twice for three years in 2017 and 2020.
Most recently, the swap agreement for the exchange of CNY 15 billion or MNT 6 trillion was renewed in July 2020, and the swap agreement was extended for another three years.
The purpose of the swap agreement is also to ensure financial stability. In addition to foreign exchange reserves, the swap provides a source of additional foreign exchange that can be drawn on. Within the framework of medium and long-term cooperation between the two countries, Mongolia has proposed to use the swap agreement to further address environmental challenges, such as climate change, green financing, and sand and dust storms.