Mongolia raises interest rate to 9 percent to fight currency slide www.news.mn
Today (24 March), Mongolia’s central bank has lifted the country’s key interest rate by 2.5 percentage points to 9 % in a desperate move to halt the home currency’s decline amid Russia-Ukraine crisis.
Four days after Russia invaded Ukraine on February 24, the governor of the Bank of Mongolia (BoM), B.Lhagvasuren, told reporters that the national lender boasted USD 4.3 billion in reserves as of the start of 2022, and that the reserves were more than enough to cover seven to eight months. Yet there have been instances of bank customers blocked from making foreign payments of more than MNT 4 million (less than USD 1,700) and prevented from obtaining more than USD 1,000 per day.
Customers were informed by their banks that the central bank had set limits on foreign exchange transactions. However, the BoM suggested that individuals banks may have set their own limits on the amount of dollars that can be withdrawn, taking account of their internal reserves.
The Ukraine crisis is putting Mongolia’s economy to crisis. Inflation has hovered around 13 percent since January and in February it topped 14 percent. Since the start of the Ukraine war, the Mongolian Tugrik has dramatically fell against US Dollar from USD 2,842 to USD 3100.
Published Date:2022-03-24