As  Parliament gets
ready to discuss the monetary policy, the Mongol Bank President has revealed
several encouraging figures. Money supply has reached MNT3.6 trillion, rising
42.6% over last year; foreign currency reserve has reached USD1.6 billion,
21.1% more than in 2009; bank deposits have risen considerably.  The Central Bank will continue with measures
to increase the foreign currency reserve. He also said the stronger MNT will not
be a worry until 2013, when exports from Oyutolgoi and Tavantolgoi will begin.
The bank will take all appropriate measures to make Mongolian exports competitive.
The National Development and

Innovation Committee has also considered the
matter.

The Government has been urged to restrict its guarantee for bank savings. These
now total MNT3.5 trillion, equaled to the 2011 united budget.

The Central Bank would like to keep inflation under 10%. It lowered its policy
interest rates but commercial banks did not follow the lead and credit is still
difficult to access because of the high interest they charge.  Only when banks begin lending at easier rates
will the economy revive. Some MPs have suggested that the Central Bank reduce
its rates to 1%, as in Japan.
The present  law allows banks to hold
fixed deposits only for  one year and
this makes it difficult for them to issue long-term loans for major investments.
The Development Bank will meet this need. The President of the Mongol Bank wants
to see what the impact on the budget is of the payment of MNT21,000 to every
citizen. If this increases the inflation rate, the Mongol Bank might not reduce
policy interest rates.