- Decision
- Maintain
- Rate change
- 0 bps
- Policy rate
- 12%
The Central Bank of Mongolia’s Monetary Policy Committee left the policy interest rate unchanged at 12% in its June 24, 2026 statement, saying the decision reflected the current state of the economy, banking and financial markets, and domestic and external risks, with annual inflation having accelerated to 11.2% in May on higher fuel and food prices even as most non-mining sectors remained weak and core inflation stayed relatively low. The central bank said first-quarter 2026 economic growth accelerated to 7.9%, driven mainly by mining and transportation, and expects growth this year to be supported by higher mining production and continued large-scale construction projects, while the non-mining sector gradually recovers in the coming years. It said inflation has temporarily moved above target because of supply-side factors but is expected to stabilize within the medium-term target range, consistent with its objective of stabilizing inflation at 5% within a plus-or-minus 2 percentage point band from 2027. Externally, it cited rising oil and energy prices linked to the Middle East conflict as a source of stronger global inflationary pressure, while stronger-than-expected growth in China and higher-than-expected gold and copper prices were seen as supportive for Mongolia’s growth and trade conditions. The committee said it will decide whether to raise the policy rate based on future inflation developments, supply-side factors, and domestic and external economic conditions.
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.