Currency depreciation raises concerns over Mongolian economy
ULAN BATOR, Jan. 9 (Xinhua) -- The Mongolian tugrik has fallen to a 22-month low against the U.S. dollar last week, triggering concerns about the health of the country's economy.
According to the latest exchange rate published by Mongolia's central bank Monday, the tugrik was traded at 1,428.57 to the greenback last Friday, the lowest since March 8, 2010.
The steep depreciation of the currency in recent months has raised concerns over Mongolia's economy.
The depreciation of tugrik has been common in winters over the past years, especially at the turn of a year, when foreign currencies flow out of Mongolia, as foreign investors stop investing and bring their money back home.
This year's fluctuations of tugrik, however, is much more dramatic than previous years.
Mongolia's economy and foreign direct investment (FDI) are highly dependent on mining sectors. The risk of a global economic downturn has raised concerns over the plummet of prices of such commodities as copper, iron ore and coal, which are essential to Mongolia's economic growth.
The fluctuations of tugrik have also compromised the central bank's efforts to fight inflation.
D. Batjargal, director of the Institute of Finance and Economics, told local media that the appreciation of the dollar has increased the prices of imported goods, which in turn has pushed up the prices of consumer goods.
Illegal currency dealers were also responsible for the dramatic tugrik depreciation, he said.
Editor: Bi Mingxin
According to the latest exchange rate published by Mongolia's central bank Monday, the tugrik was traded at 1,428.57 to the greenback last Friday, the lowest since March 8, 2010.
The steep depreciation of the currency in recent months has raised concerns over Mongolia's economy.
The depreciation of tugrik has been common in winters over the past years, especially at the turn of a year, when foreign currencies flow out of Mongolia, as foreign investors stop investing and bring their money back home.
This year's fluctuations of tugrik, however, is much more dramatic than previous years.
Mongolia's economy and foreign direct investment (FDI) are highly dependent on mining sectors. The risk of a global economic downturn has raised concerns over the plummet of prices of such commodities as copper, iron ore and coal, which are essential to Mongolia's economic growth.
The fluctuations of tugrik have also compromised the central bank's efforts to fight inflation.
D. Batjargal, director of the Institute of Finance and Economics, told local media that the appreciation of the dollar has increased the prices of imported goods, which in turn has pushed up the prices of consumer goods.
Illegal currency dealers were also responsible for the dramatic tugrik depreciation, he said.
Editor: Bi Mingxin
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