Regulation on Calculating and Controlling Reserve Requirements

Publication Date: 2007
Document Type: Other (PDF)

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Regulation for setting reserve requirements on bank deposits and for monitoring maintenance in Mongolia.

This document regulates the calculation and control of reserve requirements for banks in Mongolia. The document discusses:

• The purpose of the regulation: To set reserve requirements on bank deposits and to monitor its maintenance with the purpose of controlling money supply by the Bank of Mongolia (BOM) and of satisfying bank liquidity demand.
• Interpretation of the terms that the regulation uses.

The regulation covers the following topics:

• Determination of “togrog” reserve requirements and ensuring compliance;
• Determination of foreign currency reserve requirements and ensuring compliance;
• Supervision and actions that the BOM takes.

The regulation includes the following points:

• The “Monetary Policy and Research Department” will determine reserve requirements by setting daily minimum balances of “togrog” denominated current account of a bank with the BOM.
• Foreign currency reserve requirements shall be calculated in accordance with data that the banks provide and will include certain specific procedures.
• The Monetary Policy and Research Department shall supervise the fulfilment of reserve requirements by individual banks.
• The BOM shall issue penalties if a bank fails to meet the reserve requirements.