Inflation in China slowed slightly in December, but was marginally above market expectations. Experts have pointed to inflation in China as an external factor creating inflationary pressures in Mongolia, as a large exporter of Chinese goods.

“We think Beijing is reasonably comfortable with policy settings, with any shift in the near term likely to take the form of lower bank-reserve requirements rather than cuts in benchmark interest rates,” Royal Bank of Canada economist Brian Jackson said in a note.

Analysts widely expect China's central bank to lower the reserve ratio—which would free up funds for banking lending—by the Lunar New Year holiday, which starts 22 January. The People's Bank of China last lowered the reserve ratio at the end of November, effective from December, but has resisted making any more powerful measures, such as cutting interest rates.