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Mongolia’s financial ratings lowered by Fitch |
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Thursday, 05 June 2008 |
 Mongolia’s international
financial ratings were lowered Wednesday by Fitch Ratings. In their
report, a revised outlook on Mongolia's long-term foreign and local
currency issuer default ratings (IDRs) was lowered from positive to
stable, and assigned a rating of 'B+'. This was based upon Mongolia's
deteriorating current account balance and an ongoing acceleration in
inflation.
Fitch officials cautioned that
a more serious erosion in Mongolia’s account balance could harm Mongolia's
external financial position. This, coupled with the high rate of inflation,
could put into jeopardy the country's overall economic stability, Fitch
said.
Fitch also voiced concern that
June parliamentary elections could harm Mongolia’s financial position
if populist spending commitments are put into place.
Not all the news, however,
was bad. Fitch predicted a steady increase in foreign investment
within Mongolia’s mining sector. Fitch also anticipates Mongolia's
international reserves, including gold, will increase through 2009.
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