ULAN BATOR, June 22 (Xinhua) -- Mongolia's central bank on Wednesday decided to raise its benchmark interest rate to 10 percent.
"We decided to raise the benchmark interest rate from 9 percent to 10 percent to stabilize the rate of inflation in the medium term, ensure the external and internal balances of the economy at a reasonable level and maintain the relative return of the Mongolian national currency Tugrik," Byadran Lkhagvasuren, governor of the Bank of Mongolia, told a press conference.
Some external factors prompted the bank to make the decision, Lkhagvasuren said. "Inflation expectations are rising, coal exports are declining and imports are increasing, and the balance of payment deficit is widening."
The annual inflation rate in Mongolia reached 15.1 percent in May, while in the capital Ulan Bator, home to over half of the country's population of 3.4 million, the figure reached 16.2 percent. ■