Bank of Mongolia keeps policy rate at 12.5%

Annual inflation fell by 0.5 percentage points nationwide to 12.5% in August, while inflation in the capital declined to 11.6%. The central bank attributed the slowdown mainly to improved supplies of meat and vegetables and slower growth in domestic food prices. Core inflation stood at 6.8%.

Mongolia’s economy grew 7.7% in the first half of the year, driven largely by the mining and transportation sectors, while growth in several other sectors weakened.

The central bank warned that inflation could face renewed pressure from higher government spending, wages and fuel prices. Global uncertainty has also increased amid conflicts in the Middle East and higher energy prices.

At the same time, elevated gold and copper prices have supported Mongolia’s terms of trade, while foreign exchange reserves have improved and the tugrug has remained relatively stable.

The Bank of Mongolia expects inflation to gradually decline from the second quarter of 2027 and reach around the upper end of its target range by year-end.

Earlier, Qazinform reported Mongolia’s industrial output surged 56% in the first eight months.