The loan, which is to be issued by Rosselkhozbank, "will be used to buy Russian machinery and other Russian goods," Putin said after the meeting with Mongolian Prime Minister Sanjaagin Bayar.
The two countries also discussed the possibility of using the ruble and the Mongolian tugrik as trade currencies. Trade between Mongolia and Russia in 2008 totaled $1.3 billion, Putin said.
They also said they would cooperate in the railroad sector.
"We've agreed on the creation of a joint enterprise with Russian Railways and on the joint use of Mongolia's natural resources to realize major investment projects," Bayar said.
State industrial conglomerate Russian Technologies has an interest in Mongolia's Erdenet copper mining project, and the country also has considerable coal deposits.
The two countries also discussed closer political cooperation -- including military, educational and political exchanges.
Putin said Russia would continue sending specialists to train Mongolia's armed forces and accept 230 Mongolian students at Russian universities. Bayar said he was interested in forging closer ties between the Mongolian People's Revolutionary Party and United Russia, which Putin heads.
The prime ministers also signed a cooperation agreement between state-run Rosatom and the Mongolian Atomic Energy Department as well as agreements on culture and science.
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