The Bank of Mongolia kept its benchmark interest rate at 12.5% at its September 2026 meeting, following a 50-basis-point increase in August. Annual inflation eased to 12.5% in August, while core inflation (excluding volatile components) edged down to 6.8%. Policymakers nevertheless warned that higher fuel and global food prices, increased government spending and rising wages could intensify inflationary pressures. Inflation is expected to slow gradually from the second quarter of next year and reach the upper range of the target range by year-end. The central bank also said this year's budget amendment and approval of next year's budget draft could significantly alter the inflation outlook. Economic growth is forecast to reach 7.7% in the first half of 2026, driven mainly by mining and transport, while risks from the Middle East conflict and higher energy prices remain elevated.