Mongolia’s tugrik, the world’s worst-performing currency in August, is in its longest losing streak on record as the nation’s government seeks ways to stabilize an economy it says is in the grip of a crisis, according to Bloomberg.
The currency weakened a 22nd day to 2,243.50 per dollar. In the capital Ulaanbaatar, the lowest level in Bloomberg data going back to 1993. The tugrik’s 7.8 percent drop this month is the biggest among 154 currencies tracked by Bloomberg, taking its decline in 2016 to more than 11 percent.
Mongolia has suffered from falling commodities prices, an economic slowdown in China and waning interest by foreigners spooked by anti-investment laws and inconsistent policy. Prime Minister Erdenebat Jargaltulga has rolled out an economic recovery plan that includes salary cuts, debt reduction and development of a council to attract foreign investment, according to a televised statement issued Tuesday. He became prime minister after the Mongolian People’s Party unseated the Democratic Party in a landslide win in June elections.
“We are in a deep state of economic crisis,’’ Finance Minister Choijilsuren Battogtokh said in a nationally televised address last week. “We came into a situation where we may not be able to afford to finance salaries and operational costs of government departments, such as the Mongolian military who protect our borders and national security, the social and health employees who are in charge public health, as well as individuals in culture and sport.’’
Mongolia had foreign currency reserves of $1.3 billion at the end of June, according to data published by the central bank. That cash pile declined 23.1 percent from a year earlier after the previous government increased spending ahead of the elections.
A team of International Monetary Fund representatives arrived in Mongolia Tuesday and will begin talks with the government on resolving economic challenges, according to local television.
Neil Saker, the IMF’s resident representative in Mongolia, declined to give details of the meetings, saying it’s the “IMF’s routine global practice to establish early contact with newly elected governments.”