Pol­icy in­ter­est raised to 11 per­cent

The UB Post - - Front Page - By B.OCHIRJAMAA

The pol­icy in­ter­est rate has been re­verted to 11 per­cent, an­nounced Mon­gol Bank’s Mone­tary Pol­icy Com­mit­tee on Tues­day.

The de­ci­sion to in­crease the pol­icy in­ter­est rate back by one per­cent­age point was fi­nal­ized at an ir­reg­u­lar meet­ing held by the com­mit­tee on Novem­ber 27.

The com­mit­tee cut the pol­icy in­ter­est rate by one per­cent­age point on De­cem­ber 25, 2017 and by an­other per­cent­age point on March 23, 2018 to stim­u­late eco­nomic re­cov­ery since the 2016 fi­nan­cial cri­sis.

By the end of Oc­to­ber, the an­nual in­fla­tion rate stood at 6.3 per­cent, with the in­fla­tion rate in Ulaan­baatar ris­ing to 6.8 per­cent.

Even though min­eral prices are main­tain­ing their value and the econ­omy over-per­formed by ac­cel­er­at­ing 6.7 per­cent, un­clear ex­ter­nal con­di­tions are a con­cern for the econ­omy, re­ported the com­mit­tee.

The com­mit­tee pointed out a few fac­tors af­fect­ing neg­a­tively on the balance of pay­ment and caus­ing tu­grug de­pre­ci­a­tion. Th­ese fac­tors were rel­a­tively high fis­cal deficit ap­proved for next year, US Fed­eral Re­serve rais­ing in­ter­est rates, and China set­ting lim­its on coal im­ports. Mon­gol Bank ex­plained that it de­cided to in­crease the pol­icy in­ter­est rate in an ef­fort to main­tain cur­rent eco­nomic ac­tiv­ity.

This de­ci­sion is said to be con­sis­tent with the bank’s tar­get for medium-term in­fla­tion rate, will likely in­crease tu­grug ex­change rate, and help main­tain medium-term eco­nomic sta­bil­ity.

Dur­ing the meet­ing, Mon­gol Bank ap­proved a 28-day se­cu­ri­ties trade start­ing De­cem­ber 2018.

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