Bom's policy in effect: Weighted average lending rate falls 2.2 points

ZGM DAILY

2018-09-05 16:30 GMT+8

Weighted average lending rate on MNT deposits fell by 2.2 percentage points, reaching 18.1 percent by the end of July. As for business loans, the interest rate stands at 17.5 percent, which is 0.5 points less compared to the same period of last year. Weighted average interest rate on savings also declined by 1.8 points year over year, to 11.2 percent.

Deposit rates of private entities stands lower at 8.5 percent. The Bank of Mongolia (BoM) highlighted that loose monetary policy is the key driver in the lower savings and lending rates. As a reminder, the BoM reduced the interest to 10 percent earlier this year, which is the 9­ year lowest rate.

Compared to other middle­in­ come countries, the interest rate in Mongolia remains five percent higher and by over 10 percent com­ pared to East Asia and the Pacific. Therefore, the BoM prepared a strategy to reduce the interest rate and presented it to the Parliament. The bank informs the strategy will aim at creating favorable economic condition and introduce effective banking management through its monetary policy.

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