Bank of Mongolia announced that it raised its policy rate by 1.0 percentage point to 13 percent on Wednesday.

The monetary policy committee of Bank of Mongolia held a meeting on Wednesday and reached the decision above with majority votes in a poll.

All 14 members of the committee and President of the Bank of Mongolia agreed on the decision to raise its policy rate.

The monetary policy committee raised its policy rate by 1.5 percentage points to 12.0 percent in July 2014.

In the past two years there had been positive signs in term of inflation and inflation measured by CPI which fell  to 11 percent.

Due to the exchange rate of the MNT against foreign currencies, and consumer price increases with government regulations, the nation's core inflation is high, at 12.6 percent.

The flow of foreign currency to the economy has not recovered, and foreign direct investment fell for the third year.

The Bank of Mongolia reached the decision to support the trade balance of the economy until the state of foreign trade has improved and the flow of foreign exchange has increased.