Mongolia is not immune to the possibility of economic crisis, which has struck terror in the west, warned Governor of the Bank of Mongolia L. Purevdorj. Both the International Monetary Fund (IMF) and World Bank have warned that the world economy is headed for another economic crisis. Stagnating growth in the western world threatens to pull down Mongolian exports, especially copper. It is possible that the 2008-2009 economic crisis could repeat itself, he said.

Mongolia's economy has grown to a record breaking 16.7 percent in the first three quarters in 2011. Currently, however, Mongolia is entirely dependent on the revenue from mineral exports, making it vulnerable to external changes. Salary raises to employees of the government and the mining sector have made it difficult for the private sector to compete to attract outstanding employees.

Bank reserves have grown 26.7 percent to reach MNT 8.1 million, and credit has risen 48.2 percent to MNT 4.9 trillion in the first nine months of this year. Interest rates on loans have decreased 3.3 percent, while U.S. dollar loans have fallen 2 percent. Banks will have to grow bigger to effectively handle growing financial assets, said Purevdorj.

To combat inflation, the Central Bank has tightened its monetary policy. Its aims to achieve sustainable economic growth that will be stable in the long term. Sustainable economic growth includes inflation below ten percent, limited yet stable economic growth, and confidence in the Mongolian tugrug. If inflation grows above 10 percent, it could create uncertainty towards consumption, investment, and savings and loans. Even at 10 percent, inflation could be a tremendous challenge to reducing poverty and maintaining the living standards in Mongolia. Purevdorj blamed the possibility of recession in Mongolia on a too-fast expanding budget, government intervention in the market and appreciation of the tugrug.

To counter these issues, the governor prescribed a wider distribution of growth, increased productivity and jobs, and priority given to the development of the private sectors. State policy should also encourage growth in finance. If banks cannot increase their equity or improve management, they risk damaging the entire sector, he said.