D.Boldbaatar, Director of Mongolbank’s Monetary Policy Research Department, answers questions on the economic condition and the monetary policy.
How does Mongolbank see the economy?
Statisticians and sociologists from Mongolbank make a broad survey of the social, economic and financial sectors once every two years. The results of the last survey, made in late 2009, can be seen on our website. At the time, the banking sector was very unstable. Since then, the economic situation has shown considerable improvement and banks also are in a stronger position.
What are your inflation estimates?
Inflation is on the rise, and stood at about five percent at the end of January. This is quite high. The main triggers were the heavy snowfall and the heating price. Neither is a permanent factor.
Did the distribution of MNT 70,000 each to 1.3 million citizens affect the inflation rate, as many had feared?
It is too early to say. We have to wait for the February statistics. However the foreign trade deficit may be more than in February last year. Import costs have risen sharply.
What is the monetary policy likely to be? Will the economy improve?
When Parliament approved the monetary policy, we had all expected the economy to perform better than earlier expected. Unfortunately the GDP fell because of the swine flu. Then came the severe winter. Thus, it is doubtful that the economic growth will be high. Everything will be clear in March when the statistical figures come out.