Standard & Poor’s increases Mongolia’s credit rating

Monday, 17 December 2007 06:42

The government of Mongolia, along with the business community, received news last week that Mongolia’s credit rating has been increased to 'BB+' from 'BB'.

'The upgrade in the ratings on Mongolia reflects the country's fast-improving debt and external liquidity ratios, in conjunction with its solid growth prospects on the back of a burgeoning mining sector,' Standard & Poor’s said.

'These factors, coupled with generally prudent economic and fiscal management, are materially reducing the country's fiscal and external vulnerability, which have traditionally constrained its rating, especially given its narrow economic base and exposure to commodity price swings,' it said.

As a practical matter, the improved credit rating means borrowing money on behalf of the government and business will become less expensive as Mongolian-related loans will assume less risk.

In announcing the improved credit rating for Mongolia, Standard & Poor’s noted economic growth in Mongolia is expected to again average 7-8 percent in 2008-2010. This growth makes the Mongolian economy one of the fastest growing in the world.

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