Central Bank of Mongolia lowers key rate to 6%

AKIPRESS.COM - The Monetary Policy Committee of the Bank of Mongolia (BoM) made decisions at its irregular meeting held today to set the policy rate at 6 percent, reducing it by 2 percentage point, Montsame reports.
The committee lowered the reserve requirement ratio of tugrig by 2.5 percentage point to 6 percent, restructure and defer the consumer loans until July 1, 2021, and introduce long-term refinancing tools to support SMEs and non-mining exports.
"This decision is aimed at mitigating the negative impact of the COVID-19 pandemic on the economy and the banking and financial sector, as well as the financial burden on citizens, businesses and financial institutions. It will also support financial and economic stability without compromising inflation targets in the medium term. Annual inflation reached 2.4 percent nationwide in October 2020 and 2.6 percent in Ulaanbaatar.
Inflation will increase slightly in the coming months due to the base period, but will remain low due to economic activity and will not exceed the target level. The economy contracted by 9.7 percent in the first half of 2020 due to the pandemic, but it slowed to -3.1 percent in the third quarter, improving the balance of payments forecast.