ArdNews

📈 Money Supply Outpaces Credit Growth as Mongolia’s M2 Hits MNT 53.1 Trillion

August 17, 2026

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💵 Mongolia’s broad money supply continued to expand rapidly in July, highlighting strong growth in banking-system liquidity. Preliminary data show M2 reached MNT 53.1 trillion at the end of July 2026, rising 25.2% year on year, or MNT 10.7 trillion. The increase was primarily driven by growth in tugrik deposits, tugrik current accounts and foreign currency current accounts.

🏦 Tugrik deposits rose 25.1% year on year to MNT 28.8 trillion, with household deposits accounting for MNT 23.6 trillion, or 82% of the total. In contrast, foreign currency deposits declined 6.9% from a year earlier to MNT 5.0 trillion. Foreign currency current-account balances, however, surged 76.9% to MNT 6.7 trillion, becoming one of the strongest contributors to overall money growth.

📈 Credit growth remained positive but showed signs of moderating on a monthly basis. Total outstanding loans stood at MNT 48.2 trillion, up 13.0% year on year but down 2.2% from June. Households accounted for 59.0% of outstanding loans, while private-sector companies represented 39.6%. Non-performing loans increased 17.2% year on year to MNT 2.5 trillion, equivalent to 5.2% of total outstanding credit.

🏠 Mortgage lending also continued to expand. Outstanding mortgage loans reached MNT 12.3 trillion at the end of June, up 18.8% from a year earlier. Asset quality remained comparatively strong, with 97.9% of mortgage balances classified as performing and only 0.8% as non-performing.

 📌 Key Takeaways

  • M2 money supply: MNT 53.1 trillion, +25.2% YoY

  • Tugrik deposits: MNT 28.8 trillion, +25.1% YoY

  • Foreign currency current accounts: MNT 6.7 trillion, +76.9% YoY

  • Total outstanding loans: MNT 48.2 trillion, +13.0% YoY

  • Non-performing loans: MNT 2.5 trillion, +17.2% YoY

  • Mortgage loans: MNT 12.3 trillion, +18.8% YoY

💡 Ard Insight

The data point to a notable divergence between liquidity and credit growth. With M2 expanding by 25.2% while total loans grew 13.0%, liquidity in the financial system is increasing considerably faster than bank credit. Strong tugrik deposit growth suggests households and businesses continue to accumulate financial assets, while the sharp rise in foreign currency current accounts warrants attention as an indicator of increased foreign currency liquidity.

For investors, the combination of rapid money-supply growth and elevated inflation could keep monetary conditions relatively restrictive. At the same time, rising non-performing loans suggest that credit quality should be monitored closely, particularly if high interest rates persist.

Source: mongolbank

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