Stronger MNT is bad for export, domestic producers
In recent days, the foreign exchange rate has been volatile, with the MNT getting stromnger. Director of Foreign Currency and Economic Board at the Mongol Bank, G.Delgermaa explains the situation.
What does a strong MNT mean for Mongolia?
People understand a strong MNT is good but that may not be always true. Stable macro economic indications are what is important. A strong MNT means investment in mining projects would cost less and this would be good. But our exports will correspondingly earn less in terms of the MNT. Imports will become cheaper so domestic production will suffer.
How does China’s freeing the yuan rate affect Mongolia?
There has been no real change in the Yuan exchange rate. But as China is our main foreign trade partner, we may have problems. Our exports to China will earn less and, as I said, cheaper imports will be bad for domestic producers.
Has this begun to happen?
It is too early to say but we are watching the situation.
What does a strong MNT mean for Mongolia?
People understand a strong MNT is good but that may not be always true. Stable macro economic indications are what is important. A strong MNT means investment in mining projects would cost less and this would be good. But our exports will correspondingly earn less in terms of the MNT. Imports will become cheaper so domestic production will suffer.
How does China’s freeing the yuan rate affect Mongolia?
There has been no real change in the Yuan exchange rate. But as China is our main foreign trade partner, we may have problems. Our exports to China will earn less and, as I said, cheaper imports will be bad for domestic producers.
Has this begun to happen?
It is too early to say but we are watching the situation.
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