B.Lkhagvasuren, Governor of the Bank of Mongolia, reported that the Monetary Policy Council of the Bank of Mongolia held a meeting today and made a decision to raise policy interest rates by 1% to be 13%.
The inflation rate reached 14.5% in November, 2022. Inflation has been falling in recent months, in line with previous projections. Foreign inflation, prices of food and fuel, budget expense and salary tends to increase next quarter.
Economic growth has slowed down globally, and prices of key export commodities have dropped. Rapid increase of budget expenses negatively affect the internal and external balance. A household debt and consumption imports tend to increase.
Economic intensification was relatively stronger than expected in the third quarter of 2022, surpassing pre-Covid-19 levels. In recent months, the mining and transportation sectors have recovered, and the construction sector has grown due to the influence of railway construction. Intensification of non-mining sectors such as trade, services, net product taxes and agricultural sectors continued to increase in the third quarter of 2022. The labor market has reached pre-pandemic level, and household consumption has increased steadily for the last 4 quarters. In further, the economic situation will depend on China's "Zero-Covid" policy, the situation at border ports, the balance of payments deficit, and actual export earnings.
Economic growth has slowed down globally, and prices of key export commodities have dropped. Rapid increase of budget expenses negatively affect the internal and external balance. A household debt and consumption imports tend to increase.
Therefore, the Monetary Policy Council made a decision to increase policy interest rate in order to stabilize inflation expectations and increase the benefit of Mongolian tugrik in the medium term. This action is consistent with the policy of reducing inflation to the target level and ensuring the internal and external balance of the economy.
The Monetary Policy Council of Bank of Mongolia will continue to take necessary policy actions until inflation stabilizes at the target level.
B.Lkhagvasuren, Governor of the Bank of Mongolia, reported that the Monetary Policy Council of the Bank of Mongolia held a meeting today and made a decision to raise policy interest rates by 1% to be 13%.
The inflation rate reached 14.5% in November, 2022. Inflation has been falling in recent months, in line with previous projections. Foreign inflation, prices of food and fuel, budget expense and salary tends to increase next quarter.
Economic growth has slowed down globally, and prices of key export commodities have dropped. Rapid increase of budget expenses negatively affect the internal and external balance. A household debt and consumption imports tend to increase.
Economic intensification was relatively stronger than expected in the third quarter of 2022, surpassing pre-Covid-19 levels. In recent months, the mining and transportation sectors have recovered, and the construction sector has grown due to the influence of railway construction. Intensification of non-mining sectors such as trade, services, net product taxes and agricultural sectors continued to increase in the third quarter of 2022. The labor market has reached pre-pandemic level, and household consumption has increased steadily for the last 4 quarters. In further, the economic situation will depend on China's "Zero-Covid" policy, the situation at border ports, the balance of payments deficit, and actual export earnings.
Economic growth has slowed down globally, and prices of key export commodities have dropped. Rapid increase of budget expenses negatively affect the internal and external balance. A household debt and consumption imports tend to increase.
Therefore, the Monetary Policy Council made a decision to increase policy interest rate in order to stabilize inflation expectations and increase the benefit of Mongolian tugrik in the medium term. This action is consistent with the policy of reducing inflation to the target level and ensuring the internal and external balance of the economy.
The Monetary Policy Council of Bank of Mongolia will continue to take necessary policy actions until inflation stabilizes at the target level.