Mongolia’s central bank has cut its policy interest rate by 1 percentage point to 10%, the bank’s Monetary Policy Council announced on March 23.

The Monetary Policy Department’s director, Bayardavaa Bayarsaikhan, said the adjustment was aimed at ensuring inflation does not exceed 8% in 2018, with the regulator expecting inflation to remain mostly unchanged at that level in 2018-2020. The move marks a second cut within the last four months as the country recovers from the 2016 crisis that saw economic growth in the country slow to 1% and its currency boarding a rollercoaster.

Growth recovered to 5.1% in 2017 partly supported by rising commodities prices and growing demand for Mongolian coal in China, which had to replace North Korean coal shipments barred by sanctions in the wake of Pyongyang’s nuclear weapons tests.

Mongolia’s annual consumer price inflation jumped 6.9% y/y in January, according to latest published figures from the national statistics office.

The World Bank expects a continued cyclical recovery in Mongolia in 2018, according to the bank’s latest Global Economic Prospects report. It has forecast growth at 3.1% in 2018 (after previous expectations that growth would come in at 2.7% for 2017), accelerating sharply to 7.3% in 2019, before easing to 5.5% in 2020.

Mongolian lawmakers have recently attempted to impose an interest rate cap on banks claiming that high interest rates are holding back growth. The central bank has rejected the lawmakers’ proposal.