B.Enhhuyag: There Was No Way Other Than Folding Money Up
We got details from Mr. B.Enhhuyag, First Deputy Governor of the Mongolbank on why commercial banks halted mortgage lending.
How does Mongolbank’ raise of policy rate affect on the economy? Did commercial banks halt their mortgage lending because of it?
Mongolbank has increased its policy rate three times since last October. We conclude that lending growth, budged expenditure and money in people’s hands through investment and social aid prompted inflation. According to the survey, lending in Mongolia increase by an average 50-60 percent annually. This is much. Thus, lending should be between 30-35 percent.
Some commercial banks are talking about increasing loan rate and some even stopped providing mortgage loans. Why?
Central bank takes no part in lending activities of commercial banks. How much lending should be provided is the internal management of the bank. We have no other way than implementing a policy of folding money up. Last week I connected to local Mongolbank directors. It is likely that some commercial bank headquarters sent messages to their local branches to stop lending.
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