Macroeconomic Forecast Mongolia

Mongolian foreign exchange reserves rose by 29.1% in 2007 to total US$1.20bn by end-year. Though this continued the trend of robust reserve accumulation in play since 2005, the growth figure was a marked decline from the 115.2% increase in 2006. As such, we have revised down our long-term forecasts for Mongolian foreign exchange reserves, with the figure now expected to total US$1.50bn by end-2008. We hold to our view though, that reserve growth will accelerate in 2009 and 2010 as massive output and export increases from the crucial copper and gold mining sectors buoys the country's foreign exchange earnings.

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