The Monetary Policy Committee of the Bank of Mongolia has decided to keep the policy rate unchanged at 12.5% at its scheduled meeting held on September 16–17, 2026. The central bank last raised the policy rate by 0.5 percentage points to 12.5% on August 12.
Announcing the decision, Bank of Mongolia Governor S.Narantsogt said that the scope for lowering the policy rate remains limited given the current level of inflation. At the same time, he noted that raising the rate further could weaken economic activity and economic circulation.
Economic growth reached 7.7% in the first half of 2026, with mining and transportation making the largest contributions, while activity in other sectors remained relatively weak.
Household consumption declined by 4.4% in the second quarter, mainly due to a decrease in non-food consumption. The Bank of Mongolia explained that this decline occurred before the full effects of previous monetary policy decisions had been reflected in the economy.
The Bank also reported that following the August policy rate increase, growth in consumer lending slowed, while business lending increased.
Inflation expected to decrease but remain above target
N. Urgamalsuvd, Director of the Monetary Policy Department at the Bank of Mongolia, said inflation is expected to decline from its current level by the end of the year, but remain above the central bank’s target.
According to the Bank of Mongolia, annual inflation in August stood at 12.5% nationwide and 11.6% in Ulaanbaatar. Core inflation was 6.8%. The decline from the previous month was mainly attributed to increased supplies of meat and vegetables and a slowdown in domestic food price growth.
The central bank said inflationary risks remain due to higher fuel prices and their knock-on effects, global food prices, and increases in government spending and wages. It expects inflation to gradually ease from the second quarter of 2027 and reach around the upper end of the target range by the end of 2027.
S.Narantsogt said that once the 2026 budget amendment and the 2027 budget are approved, their effects on economic activity and inflation will be reassessed. He added that the Monetary Policy Committee could hold an extraordinary meeting if necessary.
The Bank of Mongolia also reiterated that it has not printed money to finance the economy, citing the inflationary risks associated with such a measure, and said it would not do so going forward.
The Monetary Policy Committee of the Bank of Mongolia has decided to keep the policy rate unchanged at 12.5% at its scheduled meeting held on September 16–17, 2026. The central bank last raised the policy rate by 0.5 percentage points to 12.5% on August 12.
Announcing the decision, Bank of Mongolia Governor S.Narantsogt said that the scope for lowering the policy rate remains limited given the current level of inflation. At the same time, he noted that raising the rate further could weaken economic activity and economic circulation.
Economic growth reached 7.7% in the first half of 2026, with mining and transportation making the largest contributions, while activity in other sectors remained relatively weak.
Household consumption declined by 4.4% in the second quarter, mainly due to a decrease in non-food consumption. The Bank of Mongolia explained that this decline occurred before the full effects of previous monetary policy decisions had been reflected in the economy.
The Bank also reported that following the August policy rate increase, growth in consumer lending slowed, while business lending increased.
Inflation expected to decrease but remain above target
N. Urgamalsuvd, Director of the Monetary Policy Department at the Bank of Mongolia, said inflation is expected to decline from its current level by the end of the year, but remain above the central bank’s target.
According to the Bank of Mongolia, annual inflation in August stood at 12.5% nationwide and 11.6% in Ulaanbaatar. Core inflation was 6.8%. The decline from the previous month was mainly attributed to increased supplies of meat and vegetables and a slowdown in domestic food price growth.
The central bank said inflationary risks remain due to higher fuel prices and their knock-on effects, global food prices, and increases in government spending and wages. It expects inflation to gradually ease from the second quarter of 2027 and reach around the upper end of the target range by the end of 2027.
S.Narantsogt said that once the 2026 budget amendment and the 2027 budget are approved, their effects on economic activity and inflation will be reassessed. He added that the Monetary Policy Committee could hold an extraordinary meeting if necessary.
The Bank of Mongolia also reiterated that it has not printed money to finance the economy, citing the inflationary risks associated with such a measure, and said it would not do so going forward.