S&P affirms Mongolia ratings, outlook stable

HONG KONG - Mongolia's public finances remain weak despite the announcement of a structural reform and funding programme with the IMF, says ratings agency Standard & Poor’s, which is affirming its ‘B-/B’rating on the country. S&P says fluctuations in global commodities markets continue to pressure
Mongolia's public finances and balance of payments.

Although the Government has taken positive steps by increasing transparency and introducing nascent reform efforts since taking office in mid-2016,developing institutional effectiveness and predictability hamper policy responses,” S&P says.

“We are therefore affirming our long-term sovereign credit rating on Mongolia at 'B-'. We are also affirming our 'B' short-term credit rating on the sovereign.

The stable outlook balances the country's low-income resource-driven economy, emerging policy environment, weak fiscal performance, high external risk, and limited monetary flexibility with the prospect that large mining projects could quickly improve Mongolia's sovereign credit profile during the next 12 months.

S&P says Mongolia’s stable outlook balances the country's low-income resource-driven economy, emerging policy environment and fiscal performance, high external risk, and limited monetary flexibility with the prospect that large mining projects could quickly reverse Mongolia's sovereign credit profile during the next 12 months.

“This outlook also assumes that official creditor support is imminent to contain balance-of-payment and fiscal pressures,” it says.  www.standardandpoors.com (ATI).