Enkhtaivan Ganbold, deputy governor of the Bank of Mongolia, spoke to Global Finance about the bank’s promotion of sustainable finance and plans for the upcoming year.
Global Finance: What are your core priorities for the Bank of Mongolia over the next 12-24 months?
Enkhtaivan Ganbold: The global economic environment remains highly uncertain. Geopolitical tensions, trade fragmentation, and volatile prices of commodities and energy pose particular challenges for small, open, energy-importing economies such as Mongolia.
Against this backdrop, our priority over the next 12-24 months is to strengthen both economic and institutional resilience. Earlier this year, the Bank of Mongolia adopted a new medium-term strategy for 2026-2030. Its central purpose is to enable us to fulfil our legal mandates more effectively: maintaining price stability and safeguarding financial stability.
GF: The policy rate was held at 12% for an extended period, while inflation has recently risen again on food and fuel. How do you assess the balance of risks to price stability versus growth?
Ganbold: Monetary policy remained restrictive throughout 2025, helping to bring inflation down to 7.5% by year-end and back within the target range. Economic growth has remained strong, supported primarily by the mining sector; while activity other than mining has been relatively subdued. With inflation largely driven by supply-side factors, the Monetary Policy Committee kept the policy rate unchanged at 12% at its June meeting.
By August, inflationary pressures had become more persistent. Fuel prices had risen more than expected, food prices had failed to decline as anticipated, and inflation expectations were rising, heightening the risk of second-round effects. In response, the Monetary Policy Committee raised the policy rate by 0.5 percentage points and increased the reserve requirement on banks’ domestic-currency liabilities by the same amount.
GF: Amendments to the Law on the Central Bank are being proposed. What specific changes do you regard as most important, and how will they improve policy effectiveness and credibility?
Ganbold: A clear mandate, together with the independence to pursue it consistently, is particularly important during periods of heightened uncertainty. The proposed amendments would explicitly establish price stability as the Bank of Mongolia’s primary objective, removing ambiguity over the hierarchy of its policy objectives.
The amendments would also strengthen the bank’s institutional and financial independence by prohibiting quasi-fiscal activities and introducing a rules-based mechanism for restoring the bank’s capital position. The amendments also aim to improve consistency between fiscal and monetary policy, reducing the risk that fiscal pressures undermine the inflation objective.
GF: Foreign-exchange reserves have reached record levels, yet Mongolia remains highly exposed to commodity prices. What is your strategy for further building reserves, allowing greater exchange rate flexibility, and reducing external fragility?
Ganbold: Foreign-exchange reserves reached a historic high of $8.3 billion in August, providing an important buffer against external shocks. However, reserves alone cannot eliminate the country’s structural vulnerabilities.
We have adopted a medium-term strategy built around three priorities. First, we will continue to build reserves on a sustainable basis, particularly during periods of strong export earnings and favorable commodity prices. Second, we aim to allow greater exchange-rate flexibility so that the exchange rate can increasingly serve as a shock absorber, while intervention remains focused on limiting excessive volatility and addressing disorderly market conditions. Third, we will strengthen reserve management through greater diversification, prudent liquidity management, and improved investment efficiency. Our objective is not simply to maximize reserves in nominal terms. It is to maintain an adequate, resilient, and well-managed buffer against external shocks.
GF: Looking beyond the immediate cycle, how do you see the Bank of Mongolia contributing to economic diversification and resilience?
Ganbold: Resilience requires us to understand emerging risks that could affect our mandates. Mongolia is particularly exposed to climate-related shocks, which can affect inflation, economic activity, borrowers’ repayment capacity, and financial stability. We are therefore strengthening our capacity to assess these risks and developing a sound policy framework for sustainable and green finance. During the United Nations Convention to Combat Desertification COP17 in Ulaanbaatar, we used the opportunity to deepen this dialogue with our international partners.
