2019 monetary policy directions adopted
- By Dulguun Bayarsaikhan -
- Nov 20,2018
Parliament has passed a resolution on Main Directions for 2019 State Monetary Policy, which outlines the stability of the entire economy and financial sector, and regulation for the protection of financial consumers.
Experts predict that the Mongolian economy will continue to improve in the near future as the country has been effectively overcoming its economic challenges and difficulties, and thus, achieved a stable financial situation. In the last two years, Mongolia's foreign demand has been high, foreign trade has been relatively good, and investment to the mining sector has increased not to mention that the country has restored business activity by coordinating fiscal and monetary policy to ensure medium-term economic stability.
Since facing economic difficulties in 2016, most sectors have been growing in a cumulative amount. In the first nine months of 2018, GDP grew by 6.4 percent, or an increase of 800 billion MNT. The newly-approved Main Directions for 2019 State Monetary Policy is targeted at solidifying the economic growth and improving its stability.
Mongolia is aiming to reach its nominal long-run equilibrium of eight percent in two years and as assessed in the new resolution, the inflation rate is expected to remain close to the desired amount between 2018 and 2019.
There is a need for Mongolia to reduce negative externalities, maintain the balance of external sectors, improve economic immunity, and increase foreign currency reserves to create a source for external debt repayment. In this regard, the policy directs Mongol Bank to increase foreign currency reserves by itself or with the cooperation of government organizations.
Main directions for next year also include establishing a legal environment that protects the rights of financial consumers, introducing common principles and best global practices in sustainable financing, set a standard on technology-based financial product and services, and provide legal regulation to develop infrastructure for customer information security.
The policy will facilitate the continuation of measures aimed to increase bank capital and liquidity, make regulations of the banking and financial sector consistent with international standards, improve transparency of the central bank, and develop efficient and effective public relations.