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Gold Purchase by Mongolia's Central Bank Down 21 Pct in First 8 Months

Mongolia's central bank announced on Friday that its purchase of gold decreased by 21 percent in the first eight months this year over the same period last year.

The Bank of Mongolia has purchased a total of around 9.6 tons of gold from legal entities and individuals in the January-August period.

The decline was largely related to the expiration of the effective period of low royalty taxes on gold with the 2014 amendments to the Minerals Law, according to the bank.

The 2.5 percent of discounted royalty on gold mining ended on Jan. 1, after which 5 to 10 percent royalty taxes on gold mining were imposed on miners, resulting in the decrease of the central bank's gold purchase by 71.6 percent year-on-year in the January-March period.

To revive the central bank's gold purchases, the country's parliament has set the gold royalty at a 5-percent rate.

Gold purchase by the Bank of Mongolia has been continuously increasing since the discounted royalty on gold mining came into force on April 8.

It is expected that the gold purchase will increase in September and October, which are the peak season of gold mining.

Purchasing gold is said to be one of the key tools for the mineral-rich Asian country's central bank to increase its official foreign exchange reserves.

The Bank of Mongolia purchased only 12.7 tons of gold in 2014. Thanks to the low royalty taxes on gold with the 2014 amendments, its annual gold purchase almost doubled in 2018, reaching 22 tons.

(www.chinaview.cn 2019-09-16)