FX.co ★ Mongolia Holds Policy Rate Steady at 12%

Mongolia's central bank has decided to maintain its benchmark interest rate at 12% for the second consecutive meeting. This decision reflects a cautious approach in response to stable macroeconomic conditions, a strong banking sector, developments in the financial markets, and both domestic and global economic uncertainties. Headline inflation increased to 8.8% in August, primarily due to rising prices for meat, vegetables, and flour. The central bank projects a modest rise in inflation over the coming two to three months before gradually aligning with its target range of 6% ± 2 percentage points by 2026. Economic growth is anticipated to be strong in 2025, with a 5.6% expansion in the first half driven by agriculture, and supported in the latter half by copper production and significant construction projects. Trade prospects have improved, aided by progress in international negotiations and US tariffs being lower than initially expected.