Governor of the Bank of Mongolia Narantsogt Sanjaa announced the decision of the Monetary Policy Committee (MPC) following its regular meeting held on June 23–24, 2026.

The MPC decided to maintain the policy interest rate at 12%, taking into account current domestic and external economic conditions and the medium-term outlook.

According to the Governor, rising oil and energy prices linked to tensions in the Middle East have contributed to higher global inflationary pressures, increasing risks of higher food prices, transportation costs, and other commodity prices worldwide. Although oil prices have eased in recent days following positive developments in international markets, uncertainty remains regarding the duration of geopolitical tensions and the normalization of oil transportation routes.

National inflation reached 11.2% in May, according to the National Statistics Office. Inflation increased by 4.1 percentage points over the past two months after standing at 7.1% in the first quarter. Food price increases accounted for 2.6 percentage points of the rise, while higher fuel prices contributed 0.7 percentage points. The Governor noted that weak activity in most non-mining sectors, together with tight monetary and macroprudential policies, has helped keep core inflation relatively contained.

Inflation is expected to accelerate to around 12% in June and July before easing from August as supplies of meat and vegetables increase. Assuming no additional supply shocks and improved external conditions, inflation is projected to gradually decline and return to the central bank's target range next year.

Mongolia's economy expanded by 7.9% in the first quarter of 2026, with overall growth forecast at around 5% for the year. Mining contributed 5 percentage points to first-quarter growth, while transportation added 1.1 percentage points. Other sectors contributed a combined 1.8 percentage points, although activity in trade and manufacturing remained weaker than a year earlier.

The Governor noted that major infrastructure projects are expected to accelerate this year, while large-scale power plants scheduled to come online next year should increase production capacity and support non-mining economic activity.

Mongolia recorded a USD 186 million balance-of-payments surplus during the first four months of 2026, driven primarily by strong copper and gold prices and higher mining exports. The current account surplus reached USD 311 million over the same period. Slower growth in consumer imports, supported by recent monetary and financial policies, also contributed to the positive external balance. External financing secured by banks and the private sector continues to support foreign currency inflows.

Money supply growth accelerated to 26.8% in May, with 17.8 percentage points attributable to increases in the banking system's net foreign assets linked to the balance-of-payments surplus. Credit growth has moderated in recent quarters due to the slower expansion of consumer lending, while mortgage and business lending have remained relatively strong, supporting investment and production.

The Governor of the Bank of Mongolia said that inflation is expected to moderate in the second half of the year and stabilize within the central bank's target range in 2027. However, risks remain from weather conditions, livestock disease outbreaks, and geopolitical uncertainties related to the Middle East and the Russia–Ukraine conflict, which could prolong supply-side inflationary pressures.

Taking into account current economic conditions, inflation dynamics, external and domestic risks, and prevailing uncertainties, the MPC decided to leave the policy rate unchanged at 12%. The Bank of Mongolia stated that its policy stance remains focused on bringing inflation back to target over the medium term while safeguarding economic and financial stability. Further policy adjustments will be considered in line with future developments in inflation, economic activity, and the global environment, underscored Governor Narantsogt.

Published Date:2026-06-26