The Asian country is currently undertaking IMF-backed reforms to stabilise the economy, reduce debt, build resilience to fiscal shocks and boost inclusive growth.

Mongolia’s public debt is currently 85% of GDP but the IMF suggested earlier this year that strong economic growth would help the country build reserves and reduce debt. 

Growth was 6.1% in the first quarter of 2018. If this trend continues, the fund estimates that public debt could be reduced to 71% of GDP by 2020 and 55% by 2023.

The newly secured funding, which was announced on Wednesday, brings total IMF disbursements to Mongolia to $217.33m.

The three-year loan programme, approved in May 2017, amounts to a total of $434.3m, which is part of a broader $5.5bn financing package also supported by Japan, Korea, China, the World Bank and the Asian Development Bank. 

Mongolia continues “to perform well under the programme”, with strong policy implementation and structural reforms, the fund said in a statement. 

Acting chair of the IMF executive board and deputy managing director Mitsuhiro Furusawa said the country’s growth had been helped by commodity exports and the reforms being carried out under the programme.

Public finances were also doing well, with a fiscal surplus as a result of an increase in revenues and limited spending. 

But Mongolia remains “vulnerable” to external and domestic economic shocks, Furusawa said.

“It is therefore crucial to take advantage of the still favourable economic environment to further bolster fiscal and external buffers, strengthen the banking sector, and improve the investment climate.”

The government should continue to strengthen tax administration and improve public financial management to improve resilience, the IMF added.