The Bank of Mongolia has decided to keep the policy rate unchanged at 12 percent, underscoring its focus on price stability. The Monetary Policy Committee announced the decision after its September 15-16 meeting in Ulaanbaatar. By holding the policy rate steady, the central bank aims to balance inflationary risks while supporting financial resilience.
Officials explained that this move reflects both domestic and global economic conditions. The Committee assessed recent market volatility, changes in external demand, and the performance of Mongolia’s banking sector. Governor B. Lkhagvasuren emphasized that future policy decisions will depend on inflation trends and overall economic momentum.
Inflation remains a pressing concern. National consumer prices in August rose 8.8 percent compared with the previous year. In Ulaanbaatar, the capital, the figure reached 9.8 percent. Although inflation has cooled since early 2025, food prices drove a renewed uptick in recent months. Higher costs for meat, vegetables, and flour pushed household budgets under additional strain.
According to central bank forecasts, inflation should ease gradually through 2026. Policymakers expect tighter monetary and financial measures to reduce demand pressures. However, risks still linger across several sectors. Government infrastructure projects, external trade revenues, and exchange rate swings could all generate fresh price shocks. Weather remains another factor since it directly affects food supply and farm yields.
The Governor warned that households and businesses must remain cautious. Exchange rate volatility could raise import costs, while unpredictable weather could disrupt food supplies. At the same time, global commodity shifts may challenge Mongolia’s export-driven industries. He stressed that coordination between fiscal and monetary policy will be crucial to safeguard stability.
Economic observers see the decision as a sign of steady commitment to long-term stability. By maintaining the current stance, the central bank provides businesses with predictability while signaling vigilance over inflation risks. Investors are also watching closely, as borrowing costs remain at relatively high levels compared with regional peers.
Looking ahead, the Monetary Policy Committee will continue monitoring global demand and domestic consumption. Any future adjustments to the policy rate will hinge on inflation expectations and the external trade environment. For now, Mongolia’s central bank is choosing caution over quick changes, aiming to steer the economy toward sustainable growth.
