Last September, budget has zero loss, but due to the copper price fall, the budget will be in loss by certain amount.
Some issues were clarified from Mr. A.Batsukh, the President of the Bank of Mongolia, regarding the monetary policy of the state in year 2009 was adopted by the State Great Khural.
Q: The situation was different than previous ones to adopt the monetary policy of the state. How the world crisis affects the monetary policy making procedure?
Mr. A.Batsukh: The situation is changed so much now when we were developing the monetary policy in August and September. Due to the gold and copper price fall, income of the state budget is decreased. In order to recover it, the policy of supporting economy growth will be pursued. Our main direction is to decrease inflation rate and promoting growth in economy. Thanks to the right monetary policy, inflation is decreasing gradually.
Q: Banks stopped their loan. What was the main reason of it? Was it because of strict monetary policy?
Mr. A.Batsukh: Based on the inflation calculation, the minimum reserve of commercial banks at the Central Bank was increased by 0.5% and it is set at 5.5% now. At the result, banks reserve decreased by 7,7-8,5 billion MNT and therefore, their lending capacity was decreased. But banks are lending now. It was decreased in last October. If the loan was provided without restriction, there will be so many building that are in shortage of heating. It was the warning measure for the construction companies. To spend 2000 US$ per sq. meter is not healthy project. Monetary policy helped to correct it.
Q: Can inflation will be in 1 digit?
Mr. A.Batsukh: The budget loss must not be increased previous year’s. We should correct our mistake of creating sequel price boom by increasing salary in accordance with the price increase. We should consider the foreign factor. Last September, budget has zero loss, but due to the copper price fall, the budget will be in loss by certain amount.
Q: Do you support of placing some money of Mongolia Development Fund at commercial banks?
Mr. A.Batsukh: There is nothing wrong with it. It is not loan. It is correct to place the fund for short term. Bank of Mongolia will cooperate with the Government in this regard.
Popularity: 2% [?]
No comments yet... Be the first to leave a reply!