Subscribe to RSS

The Bank of Mongolia increases Monetary Policy Rate in order to stave off inflation

The Board of Directors of the Bank of Mongolia have made a decision to increase the policy rate by 0.5 % to 13.25, with reserves required from one percent to 12 percent, from April 17th 2012.

According to the National Statistical Office of Mongolia, in March national inflation increased by 15.3%, whereas the Bank of Mongolia stated that Ulaanbaatar’s inflation increased by 17.3 %.

The Mongolian economy is still continuingly affected by the deepening of inflation which is causing a multitude of negative factors.

The price of meat has increased by 51.8 % since the beginning of this year; this includes the 68.2 % of inflation that affected Ulaanbaatar for the first three months of 2012.

In addition, petrol prices have increased by 7.1 percent since the beginning of the year. Commodities, excluding food, have now increased by 2.4 %; this includes the 29.3 % of the total rise in inflation. Due to an increase in the total demand of supplies, there is a risk of an inflation frenzy.

Particularly at this time when there is an abundant demand for capital investment coming from outside of Mongolia. There is a possibility that this will intensify inflationary pressures. Therefore the Bank of Mongolia has arranged to tighten the monetary policy by increasing the interest rate to tackle this situation.

“This clearance is the most suitable form in which the influx of capital can be controlled in our country. The East European countries, China and Turkey have also chosen this route. The amount of reserves required is administrative and is yet to be decided; the decision will follow on the 2nd of next month. This step will increase the available money reserve of banks. The available money reserve will make it possible to manage the movement of money” said D.Boldbaatar Director of Monetary policy and Research Department, Bank of Mongolia.


Add your comment


Other articlesgo to homepage

Mongolia Raises Rates Amid Debt Pressure

Mongolia Raises Rates Amid Debt Pressure(0)

Mongolia’s central bank raised interest rates this week by 1.5 percentage points to 12% to help stabilize an economy that’s been buffeted by high inflation and falling foreign investment in its mining sector. Foreign investment in Mongolia’s mines has fallen rapidly, in part due to frequent changes in local regulations governing the sector. To compensate, the government

Mongolian foreign exchange reserves decline to worrying level

Mongolian foreign exchange reserves decline to worrying level(0)

Analysts of Morgan Stanley financial services cooperation, Desmond Lee and Gaurav Singhal reported that Mongolia’s foreign exchange (FX) reserves reached 1.7 billion USD by the end of April. However, Mongolia’s FX reserves were at nearly 2.2 billion USD at the end of February, according to Mongol Bank. Mongol Bank has not officially published its April

Mongolia’s Central Bank Plans to Double Currency Swap With China

Mongolia’s Central Bank Plans to Double Currency Swap With China(0)

Mongolia’s central bank said it intends to extend a bilateral local currency-swap line with the People’s Bank of China for three years and double its size to 20 billion yuan. “This will clearly increase confidence in the foreign-exchange market and strengthen the off-balance” reserves buffer, Bank of Mongolia Chief Economist Bold Sandagdorj said in an e-mail



October 22, 2013 The Bank of Mongolia (BoM) has allowed the Bank of Tokyo Mitsubishi UFJ Ltd (BTMU) to open its representative office in Ulaanbaatar. A preparation to this measure began last year when the Japanese side, having decided to open their representation, carried out feasibility studies and submitted application materials to the BoM last



Ulaanbaatar /MONTSAME/ On the Foreign Exchange Auction held Tuesday, the Bank of Mongolia (BoM) received bid offer of USD and CNY from local commercial banks. The BoM sold USD 22.0 million and CNY 100.5 million to the local commercial banks. The same day, the BoM received bid offer of USD for Swap agreement from local

read more

Contacts and information

Get informed

Mongolian Economic, Political, Social and Mining News

Social networks

Most popular categories