Source: Asia Pacific Securities                           Date: 21 September, 2011

The Central bank advised Parliament to slowly reduce inflation over the next couple years.Monetary policies need to slowly reduce inflation from 10 percent in 2012 to eight percent in 2013 and 2014, said the Central Bank. Keeping inflation at 10 percent is difficult because the government continues to spend money on top of huge foreign direct investment (FDI) and gross domestic product (GDP) growth. It would also like to stabilize the Mongolian tugrug, suggesting it may intervene if the tugrug appreciates too high against the U.S. dollar and makes Mongolian exports uncompetitive.