www.ivcpost.com Sep 15, 2013
According to Mongolia’s Prime Minister Norovyn Altankhuyag, the country had been planning to sell its Samurai bonds this year. The sale was valued to as much as USD1 billion. It would also offer foreign investors a new way into its biggest coal project. The move was said to revive growth for the country, said the Prime Minister.
In an interview in Tokyo, the Prime Minister said, “This year we’re hoping to launch a yen-denominated bond issue, which will be equivalent to as much as USD1 billion.”
The economic growth of Mongolia had slowed to 11.3% in the first six months after its 17.5% growth in 2011. This was due to the slow Chinese demand for its coal and a disagreement with Rio Tinto Group. Rio is the country’s biggest foreign investor. Stricter legislation on foreign investment had also caused foreign interests to slump. This was even as the USD10 billion economy of Mongolia had looked abroad for help to build the infrastructure needed to develop the country’s mining industry.
During the first half of the fiscal year, foreign direct investments had decreased by USD1 billion which meant a 42% drop. Last month, the central bank of Mongolia said the country’s state spending had been outstripping income. This would mean a risk in Mongolia’s sovereign rating to downgrade after a decade of commodities boom.