Mongol Bank says external risks outweigh domestic risks

The central bank says in its 2019 Monetary Policy that external risks to the Mongolian economy outweigh the domestic risks.

For instance, the US-China escalating trade, increasing oil prices on the global market, and tightening policy of the US Federal Reserve were cited as the main external shocks. The main goals in the 2019 Monetary Policy Guideline include maintaining inflation at eight percent and increasing the foreign exchange reserves.

Domestic risks include an expanding fiscal environment and the threat of an increasing fiscal deficit. Cabinet expects fiscal revenue to increase by 2.4 trillion MNT. In terms of the deficit, Cabinet expects a 1.9 trillion MNT fiscal deficit. Analysts predict that when the fiscal budget expands and business activity increases, Mongol Bank will have to tighten its policy due to an increase in money supply.