Double-Digit Inflation Here To Stay

We have revised our end-2008 inflation forecast for Mongolia to 19.3% y-o-y (from 14.0%) on the back of persistent high food and energy price growth over the first four months of the year. With inflation at these levels, we reiterate our view that it is only a matter of time before the Bank of Mongolia allows the togrog to appreciate beyond MNT1160.00/US$. Our end-year forecast for the currency is MNT1120.00/US$.

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