Today, Bank of Mongolia announced that they will reduce the interest rate by 0.5%. This will set the new interest rate at 9.75%. Consumer inflation fell to 27.9 percent in October, down from a peak of 34 percent in the spring reached as a result of higher costs for imported food and fuel as well as salary increases, the bank said. The Bank of Mongolia can be able to reduce the interest rate as they believe that a stable outlook in price of crude oil and major consumption goods next year and the government’s decisive tight fiscal policy sets the conditions for lower inflation in 2009. This reduction in the interest rate will have positive effect on consumers as other commercial banks will follow the cut.