- Decision
- Maintain
- Rate change
- 0 bps
- policy rate
- 12%
The Monetary Policy Committee of the Bank of Mongolia on 16 September 2025 kept the policy rate at 12 percent, assessing that headline inflation slowed to 8.8 percent in August (9.8 percent in Ulaanbaatar) thanks to earlier monetary tightening, but cautioning that near-term food-price pressures and risks linked to large government projects, export revenues, exchange-rate movements and weather could lift prices before inflation converges to the target band in 2026. After a 200 bp hike in March the rate has been unchanged at 12 percent through the June and September meetings. The economy grew 5.6 percent in the first half of 2025, with more than half of the expansion coming from a recovery in agriculture, and authorities expect second-half growth to be underpinned by stronger copper concentrate production and the launch of large construction projects. The statement notes a modest improvement in the global outlook as trade negotiations progress and U.S. tariffs are set below initially announced levels, though external uncertainty remains high. The committee reiterated that future moves will depend on domestic and external developments and the evolving inflation and growth outlook.
Rate evolution
The Bank of Mongolia’s early decisions to keep the policy rate at 12 percent reflected inflation slowing on softer food and imported goods prices and past tightening, while mega-project financing, export revenues, the exchange-rate outlook and weather posed upside risks as growth moved from a slowdown to a recovery driven by agriculture, mining and large projects. By December, the Monetary Policy Committee still expected inflation within target in 2026, but said poor harvests, firm meat prices and projected wage increases had lifted the outlook, even as lower-than-feared tariff effects and stronger gold and copper prices improved external conditions.
In March 2026, it again held the policy rate at 12 percent as inflation fell to 6.5 percent near the midpoint of the target range, while warning that faster food prices, higher fuel and food costs, and geopolitical uncertainty linked to the Middle East conflict could intensify inflation. The Bank of Mongolia maintained the policy rate at 12 percent on June 23 and 24 as annual inflation reached 11.2 percent nationwide and 11.0 percent in Ulaanbaatar in May on supply-side pressures, while first-quarter growth accelerated to 7.9 percent on mining and transportation and most non-mining sectors remained weak.
On September 16 and 17, the Bank of Mongolia held the policy rate at 12.5 percent as annual inflation in August declined to 12.5 percent nationwide and 11.6 percent in Ulaanbaatar, supported by increased meat and vegetable supplies, while core inflation eased to 6.8 percent and first-half growth reached 7.7 percent on mining and transportation. It projected inflation would begin easing gradually from the second quarter of 2027 and approach the upper bound of the target range by year-end, but flagged risks from fuel-price pass-through, global food prices, fiscal spending, wage growth and budget decisions, while noting that high gold and copper prices had supported the terms of trade, foreign exchange reserves and the exchange rate.