The Central Bank has lowered its policy rate to 10 percent effective September 30. This 1.5 percent cut, the Bank’s first since June 12, has been taken as the inflation rate has been steadily declining, and is expected to help sustain the revival of growth in some economic sectors. Along with this, the repo rate has been cut by 3.5 percent, the interest rate of non-standing facilities by 2.5 percent, and the overnight interest rate by 2.5 percent. The Bank hopes all this will help lower the cost of short-term funding.
The Bank has said in a statement announcing the changes that certain positive conditions have marked the state of the economy in the third quarter of 2009. The inflation rate has been steadily declining and was 3.9 percent in Ulaanbaatar in September. Gross international reserves have exceeded USD1 billion, and the exchange rate has been stabilized.
Source: www.mongolbank.mn
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