The Monetary Policy Council of Mongol Bank held a meeting yesterday, and decided to increase the monetary policy interest rate by 4.5 points to 15 percent.
Even though annual inflation measured by the consumer price index (CPI) is supposed to be maintained to stay low, the MNT exchange rate against the USD has depreciated by 7.9 percent since the end of July. Mongolia’s foreign trade balance went up by 602 million USD in the first half of 2016 compared to the same period last year, and the nation’s current account deficit has doubled.
The council reported that there are good signs for the balance of foreign currency. The council believes that it needs to take step-by-step measures to strengthen the foundation of Mongolia’s macro economy and to strengthen trust in the MNT.
The council underlined that they are focusing on increasing the return on MNT assets in order to protect the value of the MNT and to ensure mid-term economic sustainability. Mongol Bank also reported it will adhere to a policy to ensure the balance of the MNT exchange rate by intensifying measures to fix the nation’s budgetary and monetary policies.