Loan size was decreased, but its ratio in balance

Oct 23 • Economy, Finance, Government, Interview, News • 595 Views • No Comments on Loan size was decreased, but its ratio in balance

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Housing loan issue was clarified from an official from the Bank of Mongolia

Q: You said about loan size was decreased. What policy is being pursued by the Bank of Mongolia?
A:In order to decrease inflation, loan must be in appropriate balance. For example, the money supply is around 20%, as the result of some measures taken by policy of the Bank of Mongolia. It is small number if compares with 30, 40 in the previous years and even in some years 70, 80%. It is in an appropriate balane if compares with similar economy and money supply of developing countries. Loan supply is relatively low, if compares with the previous years, but it is now in appropriate balance.

Q: How will it be in next year?
A: Money supply will be around 20% in next year. Commercial banks pursue different policies in the environment of high inflation. Some increase their capital to increase their loan, but some halt its loan giving. Both are correct. It satisfies the appropriate balance of the Bank of Mongolia, so they can bear their risk. Today is not the time for commercial banks to run in a race of loan giving and compete with their active. They should upgrade and update their administration management of convertibility. I want to say again that loan giving and not giving is not incorrect. Because, they can satisfy their risk management standard that is set forth by the Bank of Mongolia. It is all because of those borrowers; individuals, businessmen and companies are so much conservative and accustomed with cheap loan.

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