Efforts made to hold inflation at 8 percent

Decline in foreign investment blamed for lower currency rate

B.Ooluun/The Mongol Messenger

Parliament began debating a draft Bill to approve the ‘Basic guidelines of the state monetary policy for 2014’. The main objectives of the monetary policy in 2014 were directed at keeping inflation at a sustainable
level, strengthen stability of the macroeconomic and financial sectors, and improve economic immunity.

As of August 2013, inflation at the state level was 9.4 percent, and in Ulaanbaatar 8.4 percent. The Mongolbank is pursuing a goal to hold inflation at 8 percent in 2014 and no less than 7 percent in 2015-2016.
The Mongolbank was instructed to keep inflation at less than 8 percent by the end of 2013 when in 2012, it
reached 15.6 percent. Basic inflation decreased by 5.9 percent compared to last three years’ avarage due to
implementation of sub-programs on price stabilization of main food products, oil and fuel wholesale, cutoff of wholesale prices on import goods, support for the construction sector, stabilization of housing prices,
and energy cost and tariffs. Inflation measured by the consumer price index fell by 3 percent nationwide and by 4.2 percent in Ulaanbaatar compared to the last three years.

In order to reach next year’s target, the Mongolbank considers it appropriate continuing price stabilization program on goods and products. Some MPs were critical that the currency rate inflated by supplying
a great amount of money to the market under the Mongolbank price stabilization program. Tgs 3 trillion by
the program has not yet been repaid. 

The monetary policy envisaged holding a flexible policy adaptable to the key conditions of the macro
economy in relation to Mongolian and foreign currencies, maintain banking payment capacity, and be
able to overcome adverse risks of the system’s character.

From the beginning of 2013, the Monetary Policy Council of the Mongolbank changed the interest of  money policy 3 times, bringing it to 10.5 percent reducing a total of 2.75 percent which facilitated stabilizing
money and loan growth, ensuring normal operation of the financial sector, and positively influencing economic
activation. G.Zoljargal, Governor of Bank of Mongolia emphasized that uncertainty in the foreign trade and
investment environment continued from 2012 and became the major reason for limitation of support to
economy. Foreign trade conditions in the last 19 months worsened by 23 percent, direct foreign investment
decreased by 5 percent in 2012, and by 43 percent in 2013. Financial sources shrank and excluding Chinggis bond money, assets from abroad decreased by US $1.2 billion.

The deterioration of foreign trade, the decline in direct foreign investment and waning of foreign currency flow directly influenced to slacken the rate of Mongolia’s national currency. The MNT rate to USD has dropped by 17.1 percent since the beginning of 2013. 

Mongolbank intends to support investment of national industries capable to compete in the world
market and replace imports, carry on the policy directed at creating good quality workplaces, and encouraging national accumulation. The 2014 monetary policy envisaged to ensure reliable and uninterrupted operation of Mongolia’s payment accounting system, intensify the payment and account system reforms for 2014- 2016, guarantee openness in resolving monetary policy decisions, and improve the government’s monetary policy.

Source:Mongol Messenger


Post a Comment

Facebook page

Powered by Blogger.


Advertising in Mongolia An Culture Editorial of the Mongolianviews education Environmental protection Famous Mongolians Foreigners in Mongolia Inner Mongolia Ivanhoe Mines Mongolia agriculture Mongolia analysis Mongolia and Australia Mongolia and Belorussia Mongolia and Cambodia Mongolia and Canada Mongolia and central Asia Mongolia and China Mongolia and Cuba Mongolia and EU Mongolia and Germany Mongolia and Hongkong Mongolia and Hungary Mongolia and India Mongolia and Inner Mongolia Mongolia and Iran Mongolia and Israel Mongolia and Italy Mongolia and Japan Mongolia and Kazakhstan Mongolia and Korea Mongolia and Kuwait Mongolia and Kyrgyzstan Mongolia and Malaysia Mongolia and Nato Mongolia and North Korean Mongolia and Poland Mongolia and Russia Mongolia and Singapore Mongolia and South Korea Mongolia and Taiwan Mongolia and the world Mongolia and Tibet Mongolia and Turkey Mongolia and UK Mongolia and Ukraine Mongolia and UN Mongolia and US Mongolia and USA Mongolia and Vietnam Mongolia Banking Mongolia civic society Mongolia crime Mongolia diplomacy Mongolia Economy Mongolia Education Mongolia Energy Mongolia Finance Mongolia Health Mongolia History Mongolia holiday Mongolia in international media Mongolia Industries Mongolia Joke Mongolia law Mongolia LGBT Mongolia medical Mongolia military Mongolia Mining Mongolia Mining Developments Mongolia Mortgage Mongolia natural disaster Mongolia Petroleum Mongolia public announcements Mongolia railways Mongolia Religion Mongolia society Mongolia Sports Mongolia Stamp Mongolia telecommunication Mongolia tourism Mongolia Urbanization Mongolia Wild Life Mongolian Agriculture Mongolian Archeology Mongolian Food Mongolian Gay Mongolian Government news Mongolian History Mongolian Military Mongolian Mining Development Mongolian Movie Mongolian News Mongolian Parliament Mongolian Political news Mongolian Press Mongolian Songs Mongolian Women Mongolian Youth Mongolians abroad Moninfo Opinion Oyu Tolgoi Investment Agreement Photo news Press Release Rio Tinto Tavan Tolgoi coal mine Ulaanbaatar development Weird expatriates in Mongolia

Blog Archive