By CentralBankNews.info
    Mongolia’s central bank raised its benchmark by 450 basis points to 15.0 percent to help increase the return of local currency assets and ensure more stability of the tugrik currency.
    It is the first rate hike by the Bank of Mongolia since January 2015 and follows two rate cuts in January and May this year by a total of 250 points.
    The central bank said the entry and exit of foreign currencies is showing encouraging trends but further steps to strengthen confidence is the currency is required.
    The exchange rate of the tugrik has been falling sharply since late June when the Mongolian People’s Party (MPP) returned to power in a landslide parliamentary election amidst an economic slowdown from a fall in mining output.
    The tugrik was trading at 2,249.5 to the U.S. dollar today, down 11.4 percent year to date, as inflation in July declined to a year-low of 0.9 percent from 1.6 percent in June.
    The central bank said the country’s trade balance had improved by US$602 million in the first half of the year while the current account deficit had narrowed.
    Mongolia’s Gross Domestic Product grew by an annual rate of 1.4 percent in the first half of this year.

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