By Mohd Iswandi Kasan Anuar
JAKARTA, Aug 25 (Bernama) -- The Asian Development Bank (ADB) has approved US$100 million (about RM446.0 million) in emergency support to the government of Mongolia to help the Central Asia nation weather the impacts of severe economic shocks caused by Russian invasion of Ukraine and continuing border restrictions with China due to COVID-19.
Mongolia is experiencing a widening current account deficit, increased pressure on foreign exchange reserves, and rising external financing needs, according to ADB.
Rising food and fuel prices eroded purchasing power and increased poverty, the bank said, adding that inflation spiked to 16.1 per cent nationwide as of June 2022, and was particularly high for food and fuel.
In response, the government of Mongolia has prepared a countercyclical development expenditure program to help poor and vulnerable groups, ease inflationary pressure, and support macroeconomic stabilisation.
"This ADB loan will support government measures to stabilise the economy," ADB Financial Sector Specialist for East Asia, Peter Rosenkranz said in a statement.
He said the budget support provided through this countercyclical support facility loan will also provide fiscal space to continue with critical economic structural reforms over the medium term.
-- BERNAMA
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