Mongolia’s currency is on its longest losing streak on record as the government grapples to contain an economic crisis. Back in 2011, a mining boom helped make it the world’s fastest-growing economy with a gross domestic product of around 17.5%.
It’s been a rapid descent from grace for the central Asian nation, which neighbors China and Russia. The landlocked country has substantial untapped reserves of valuable minerals like gold, copper and coal. But then commodity prices collapsed. And so did demand from China, which buys 90% of Mongolia’s exports.
The government has since admitted that the country is “in a deep state of economic crisis”.
Making matters worse has been the government’s inconsistent approach to investment laws and mining agreements, causing many foreign firms to rush for the exit.
Foreign direct investment in Mongolia plummeted by 85% since 2011 to the first quarter of last year, according to the US State Department.
Due to its cash shortage, Mongolia has borrowed massively and now owes dinosaur-sized interest payments of a debt load of nearly $23bn. This has fuelled speculation that Mongolia could face a sovereign default or need a bailout.