Ulaanbaatar
Bank of Mongolia raises its policy rate
Economy
Ulaanbaatar/MONTSAME/ At its irregular meeting on November 27, the Monetary Policy Committee (MPC) of the Bank of Mongolia made a decision to raise its policy rate by 1 percentage point to reach 11 percent.
As of October 2018, annual inflation measured by the consumer price index reached 6.3 percent nationwide and 6.8 percent in Ulaanbaatar city. The prices of commodities have been kept relatively high and economy grew in the third quarter by 6.7 percent or higher than expected; however, there is a high uncertainty of external environment of economy.
Mongolia’s adoption of next year’s budget with relatively high deficit, increased interest rate of the US Federal Reserve Bank and China’s start of restrictions on coal market is affecting payment balance negatively and pressurizing on exchange rate of Mongolian tugrug.
Considering the uncertainty of external market, it was decided to raise the policy rate with an aim to keep economic activation at appropriate level in the medium term.
The
Bank’s decision is consistent with its objective to stabilize inflation at
around target rate in the medium term and aims at increasing tugrug value, maintaining trust in
national currency and keeping the mid-term stability of macro-economy.
