Fitch forecasts banking sector to be neutral next year

         Fitch Rankings company has estimated that Mongolia’s banking sector can be “Impartial”, which suggests it can neither deteriorate nor enhance from the present degree in 2024, stories Bloombergtv.mn.

Nevertheless, Fitch concluded that Mongolia’s enterprise atmosphere can be “Steady”. It reported that the primary impetus would be the continued financial progress of Mongolia and the lower of the patron worth index to a sure degree. In addition, it was estimated that Mongolia’s actual gross home product (GDP) in 2023 and 2024 will enhance by 5 p.c. This can be influenced by the exercise of the mining sector and the steadiness of home demand. Inflation is additionally forecasted to lower from the start of 2024. As for the Mongol Financial institution, they’re aiming to decrease inflation to a goal degree of 4 to eight p.c in 2024 and 2025.

Concerning the banking sector, it’s believed that the non-performing mortgage ratio of Mongolian banks will regularly lower, and the price of loans will proceed to lower. In 2023, regardless of the upward stress on costs, the standard of banks’ property remained good. It is predicted that it’s going to stay the identical even in 2024. Nevertheless, as a result of competitors and the rising price of deposit accounts, there can be stress on the rate of interest. It is usually believed that the coverage rate of interest will stay excessive in the close to time period. Nevertheless, credit score progress in 2024 can be slower than this yr, however it’s estimated that it’s going to stay in double digits.

At the moment, 5 systemically influential banks in Mongolia make up 80 p.c of the capital of the banking sector, whereas 522 non-banking monetary establishments are working. Co-Founder of Mongolian Funding Ranking Company Mohammed Tajul Islam stated, “In comparison with the measurement of the financial system and the construction of the monetary sector of different growing nations, the variety of non-banking monetary establishments working in Mongolia could be very massive.”