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Devaluation of Mongolian Currency
 
Date: 2013-08-31
 

The Mongolian currency, the Tugrug or MNT, has drastically devalued against the USD recently. There has been an 11% depreciation since January.  This is due to a number of reasons. 

There has been a sudden injection of cash into the economy from government programs coupled with less savings in bank accounts across the country.  The balance of payments in the current account has increased by 8% from last year. Despite the Bank of Mongolia injecting USD into the market and removing MNT, this has only slowed the depreciation of Monoglian currency. China’s economic slowdown has also decreased demand for Mongolia’s exports substantially.

While the current exchange rate is 1600 MNT = $1 USD analysts predict by the end of the year this will be closer to 1650.  If left unchecked, inflation will yet again be rampant in the country.

 

 

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