Ever heard of the tugrik? It's Mongolia's national currency and right now the world's worst-performing one. The tugrik is under enormous pressure as the fall in commodity prices hits it hard.
Just four years ago, Mongolia was the world's fastest-growing economy, logging a GDP increase of 12.3 percent. What fueled the boom was first and foremost foreign direct investment, peaking at around $5 billion (4.4 billion euros) - before dropping to zero last year.
That's because of the freefall in commodity prices globally which has also meant a dramatic loss of jobs in the Asian country neighboring China.
Unemployment in Mongolia reaches nearly 12 percent this year, compared with just 5 percent recorded in 2012. Gross domestic product slowed to 2.3 percent last year, the weakest pace since 2009, with analysts predicting growth to come in at just 0.8 percent in 2016.
Bank of Mongolia steps in
These developments have had a devastating impact on the nation's national currency. With the economy facing a protracted crisis, the tugrik has been the world's worst-performing currency in August, dropping 8 percent against the greenback since the beginning of the month, and 12.9 percent since the beginning of the year.
On Thursday, the central bank raised its policy rate by 4.5 percentage points in a bid to support the tugrik.
The government is mulling a package of measures to save costs. Among other things, it plans to reduce the salaries of the prime minister, the president and members of parliament by 30 percent.
Top athletes in the country are currently missing out on state payments. Prime Minister Jargaltugla Erdenebat told a cabinet meeting the government owed $756,000 to prominent boxers, freestyle wrestlers and archers, who were granted lifetime monthly payments under a scheme introduced two years ago.
hg/jd/ (Reuters, dpa, Bloomberg)