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- BREAKING NEWS -
Thursday, August 18, 2016
Mongolia Hikes Interest Rate to 15% to Fight Economic Crisis
By Michael Kohn
August 18 (Bloomberg) -- The central bank of Mongolia raised the interest rate to 15 percent to protect the currency, reversing a cut in borrowing costs to 10.5 percent in May.
The Mongolian currency rose after the announcement, all but erasing earlier declines. The tugrik was at 2,256 per dollar as of 1:16 p.m. in Ulaanbaatar on Thursday after touching a record low of 2,272.50. The currency has fallen for the past 23 days.
The cut follows the new government’s decision today to freeze some spending as part of an economic recovery plan to stave off an economic crisis. Today’s decision was taken to improve yields on tugrik assets in order to protect the currency and ensure mid-term stability, the bank said in a statement on its website.
The landlocked nation between China and Russia has been hit hard by the slump in commodity prices and the slowdown in its larger neighbors. A newly elected government roiled markets when it announced this month that the nation was in a "deep state of economic crisis."
Link to BoM Statement (in Mongolian)
Suite 303, Level 3, Elite Complex
14 Chinggis Avenue, Sukhbaatar District 1
Ulaanbaatar 14251, Mongolia
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