CENTRAL BANK THINKS INFLATION WILL BE BELOW WORLD BANK PREDICTION

The Central Bank Deputy Governor, Mr. N.Zoljargal, has disagreed with a World Bank survey prediction that inflation in Mongolia could reach 25% in 2011. The Central Bank feels inflation can be kept below 10 percent, but Mr. Zoljargal said no one could be certain about the ultimate impact on the Mongolian economy of substantial cash allocation to citizens and of global price rise. However, he discounted the World Bank’s prediction and did not foresee inflation going beyond 20%.
The Central Bank feels that 2010 was “a very good year” with clear signs of recovery from the economic crisis.  Money supply rose by 62%, foreign currency reserves reached USD2 billion and the USD flow into the market exceeded MNT one billion. The Bank will consider reducing interest rates, but Mr. Zoljargal thinks it unlikely that it will be brought down under 10% as the goal is to keep money supply below 40%.
Source: News.mn
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