By E.OYUN-ERDENE

November 25 Mongol Bank (the Central Bank of Mongolia) held a press conference to introduced October’s financial demographics of the Mongolian economy, finance and banking sectors. Mongol Bank stated during the conference that they are pursuing a policy to hold inflation in 12-14 percent. B.Lhagvasuren, director of Mongol Bank's Inspection Department said, “We are warning several times that next year’s budget is too wide-spread and it tends to increase the demand. Recently, Parliament discussed that next year’s budget should be 300 billion tugrugs. If it is held at 300 billion tugrugs, inflation will decrease.”

Mongol Bank is planning to increase commercial bank’s ability of executing the payment to 25 percent from 18 percent. But this decision is dependent on the tugrug, and Mongol Bank won’t demand the ability of executing the payment of commercial banks to be 25 percent. According to their report at press conference, Mongolia’s total activity equalled to 8.2 trillion tugrigs at the end of October with an increased result of 0.9 trillion tugrugs comparing to September and a 49.5 percent (2.7 trillion tugrugs) comparing to October, 2010.
The total loan equalled to 5 trillion tugrugs, with an increase of 165.3 billion tugrugs comparing to September and 61.2 percent (1.9 trillion tugrugs) comparing to October, 2010. The loan set consists of 94.5 percent of normal loan, 1.5 percent of expired loan and 4 percent of low-grade loan. The volume of low-grade loans during the economic crisis of 2008 reached far over 400 billion tugrugs.
Mongol Bank didn’t change the policy interest rate, leaving it at 12.25 percent. They answered the question of what will the last month’s increase in the policy interest rate, making some bankers to hold in their loan policy: “We have mentioned that the total active of the banking system increased, along with the increase in loans in great numbers. It is assumed, that the 2008 crisis was due to the mortgage crisis in the U.S. Thus, by increasing loan rates, it inevitably gives us a sense of awareness. We have observed bankers to qualify the conditions for their loans. And we can see that this did not lower the loan rates.” Also, they stated the rumour that banks will stop their loan is a myth.