BoM may leave policy rate unchanged amid high inflation www.zgm.mn
As the inflation rate exceeds the target level of 8 percent in August, the Bank of Mongolia (BoM)’s Monetary Policy Committee is scheduled to announce its third Monetary Policy Decision Today. As of August 2019, annual inflation rate has reached 8.9 percent nationwide.
The expectation of keeping the policy rate unchanged at 11 percent is dominant among economists of the Economics Club of Bloomberg TV Mongolia. However, the number of votes on increasing or decreasing the policy rates has risen slightly over the previous review. The basis for maintaining the monetary policy rate, for example, macroeconomic indicators are near target levels.
According to the Bloomberg TV Mongolia, the number of analysts assumes BoM to increase the policy rate due to high inflation. However, there are still possibilities that the policy rate could be reduced during steady economic growth.
Last month, the Monetary Policy Committee decided to keep the monetary policy rate untouched at 11 percent, which is the highest since December 2019. The monetary policy statement emphasized the basic demand-pull inflation was stable at the time.
In the first eight months of 2019, Mongolia’s total trade turnover reached USD 9.5 billion, of which USD 5.4 billion were exports and USD 4.1 billion were imports. Foreign trade surplus increased by USD 426.6 million to USD 1.3 billion.
The economic growth was 7.2 percent in 2018 and increased to 7.3 percent in the first half of 2019. Foreign exchange reserves of Mongolia reached USD 3.6 billion.