Economic Analysis - BoM To Stand Pat Amid Opposing Goals - APR 2018

BMI View: Our end-2018 1-week central bank bill rate forecast of 11.00% reflects our expectations that the Bank of Mongolia will likely stand pat on monetary policy over the coming months. While it hopes to loosen policy in an effort to support a faster pick-up in economic growth, inflation that is rising quickly towards its 8.0% y-o-y target will remove the room to do so.

We expect the Bank of Mongolia ( BoM) to keep its benchmark 1-week central bank bill rate unchanged at 11.00% over the course of 2018, following its decision to cut interest rates by 100bps to 11.00% during its December monetary policy meeting. It is likely that the central bank's Monetary Policy Committee will attempt to balance its opposing objectives of supporting the ongoing economic growth recovery and ensuring inflation remains below its 8.0% target over the coming months.

Seeking To Support Economic Growth

Steady Rate Ahead
Mongolia - 1-Week Central Bank Bill Rate, %
Source: BMI, BoM

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