The exchange rate is one of the most important determinants of a country's relative level of economic health. It fluctuates the most during economic and political crises. The reason behind the fluctuation in the exchange rate can be explained by the balance of foreign trade, the balance of payment, and other economic indicators.

According to the Bank of Mongolia, our country’s foreign exchange (forex) reserves have reached USD 3.4 billion, enough to cover the imports of goods for 6 months. For the last 10 days, Mongolian tugrug (MNT) has strengthened against USD by about 7 MNT and showed signs of stabilization.

At the end of the last year, foreign currency demands of the commercial banks were high during the forex auction of the BoM. Although, their demands decreased in March 2023. In particular, the BoM supplied the commercial banks with USD amounting to 68.3 million, while for the forex auction on March 30, no buy bids of USD were submitted from any commercial banks. On the contrary, the commercial banks submitted their USD sell bids amounting to USD 36 million to the BoM. This is the second time in recent years that the BoM has bought USD from commercial banks, the first one was in 2021.

Experts are explaining the reasons behind the MNT strengthening against USD concerning the following three factors. Firstly, the Government of Mongolia has made successful deals on re-financing the debts due in upcoming years and attracted the required financing. It could be one of the factors that impacted the exchange rate stabilization. Secondly, Mongolia commenced the fourth-largest high-technology underground mine in the world last month, which was a significant event that restored investors’ trust. Thirdly, border reopening and easing travel restrictions in China brought a real sense of optimism to the Mongolian economy. The reopening of ports linking China and Mongolia boosted the exchanges of major commodities including coal, iron ore, and machinery. As of the end of March, total coal export reached 8.7 million tons, an increase of 3.6 times compared to the same period in 2022. Moreover, Mongolia has exported 0.9 million tons of iron ore, jumping 50% from a year ago.

Meanwhile, the exchange rate of Chinese Yuan (RNB) reached a record high of MNT 519.75 in February 2023. It was mainly due to China’s post-Covid reopening and increased capital inflow. But since then, the RNB has slightly fallen to MNT, averaging around 512.19 MNT.

In any case, the MNT rate has stabilized for the last 10 days. But what will happen next?

Economists, university professors, and 27 researchers and analysts conducted USD/MNT exchange rate forecasting at the beginning of this year. According to their projections, the pair is forecasted to average at 3537.3 MNT and peak at 3618.1 MNT in the first quarter of this year. In general, a long-term weakening is expected for MNT against USD.

WeChat Pay, a mobile payment service run by China’s tech giant Tencent, is now available in Mongolia, Mongolia’s state-owned television MNB reported Tuesday, citing financial company Sendly.

“Our company has become the official partner of Tencent’s WeChat Pay in Mongolia,” Sendly said in a statement.

Currently, service providers such as hotels, restaurants and convenience stores in Zamiin-Uud soum of the southeastern province of Dornogovi and the national capital Ulaanbaatar can accept WeChat Pay payments, it said.

Mongolia has set 2023-2025 as “Years to Visit Mongolia” with a goal of welcoming at least 1 million foreign tourists and earning USD 1 billion from tourism.

The country’s tourism authorities believe that Mongolia will receive a large number of tourists from China in the next few years, and it is hoped that WeChat Pay will make Chinese tourists’ visits more comfortable and convenient.

South Korean chicken burger chain Mom's Touch&Co. said Tuesday it inked a master franchise agreement with Mongolia's Foodville Farm LLC, in its first steps to enter the central Asian country.

Foodville Farm is an independent company established by the local franchise operator Monbakery LLC to expand the Mom's Touch brand in Mongolia. The company operates the South Korean coffee franchise Caffe Bene and bakery chain Tous les Jours in the Asian country.

The South Korean chicken burger franchise said it has decided to enter Mongolia due to the country's rapid economic growth, a relatively young population and a growing interest among Mongolians in Korean food, and products from K-pop and the broader Korean Wave.

Experts said the Korean Wave generated by K-pop and TV dramas could turn fans in foreign countries into active consumers of South Korean products.

Mom's Touch's first Mongolian restaurant is set to open in the first half of this year. The company plans to add more than five stores by the end of the year, it said.

The “Action to support implementation of Codex AMR Texts (ACT)” project was presented at the Herders Forum in Mongolia on 2 March 2023, where more than 400 herders, livestock specialists, and local governors discussed the government's policies for the development of the agricultural sector, livestock production and responsible and prudent use of antimicrobial drugs and food safety.

“This was a good opportunity to present the ACT project and discuss the responsible and prudent use of antimicrobial drugs in livestock. Our survey, where we interviewed almost 500 herders in 2021, showed that most herders use antimicrobials, and they acquire the antimicrobials through the local veterinarians, however, without prescription and often without further advice on how to use them“ said Enkhtur Byakharjav, National Project Coordinator in Mongolia, interviewed by the main TV channel of Dornogovi province about the foodborne AMR and its risk.

According to Byakharjav, Mongolia has a low population density and 20 times more livestock than people. He noted that livestock-based agriculture has been a big part of the Mongolian economy for years with agriculture products contributing to 80 percent of the national economy. Livestock herding is a source of income for the majority of the rural population. Byakharjav added that low population density, households in remote locations, and poor transportation infrastructure challenge the delivery of veterinary services. Therefore, most herders end up purchasing over-the-counter medicines, leading to the use of drugs and antibiotics, which is a risk to food safety and AMR.

Because of the uniqueness of the agrifood systems in Mongolia, the ACT project has tailored several different activities in Mongolia to raise awareness of Codex texts, with a special focus on foodborne AMR, especially among herders and veterinarians.

“It would be good to have more training on antimicrobial resistance and antimicrobial use. This would help herders to address the challenges they are facing today,“ noted Mungunkhuu Uul-Uvgun, Director of the Veterinary Department of the Dornogovi province.

The ACT project is supporting the implementation of Codex standards related to the containment and reduction of foodborne AMR and monitoring and surveillance of antimicrobial use and resistance. By supporting better management of foodborne AMR in Bolivia, Cambodia, Colombia, Mongolia, Nepal, and Pakistan, the project will contribute to improved access to international markets and protect consumers against the risks posed by foodborne AMR.

Real-Time Digital Simulator (RTDS), designed for non-stop monitoring and analysis of all modes of the integrated power system has started operating as JICA has handed over the equipment to the National Dispatching Center, state-owned joint stock company. Chief Representative of JICA Mongolia Office Mr. Tanaka Shinichi, and Executive director of the Center, G. Balzhinjam signed the handover document.

The RTDS worth USD 500,000 is being applied to model and simulate the energy system of Mongolia with real data and it will make a significant impact on the step-by-step planning of actions to be implemented in the short, medium and long term to analyze energy system stability and define future tendency in detail. Used in more than 50 countries, the system electronically simulates data from real sources such as diesel generators, solar generators, and battery generators.

During the RTDS handover ceremony, Deputy Minister of Energy M. Bayarmagnai said, "For 50 years since the establishment of friendly relations, Mongolia and Japan have been developing all-round cooperation in social, cultural and infrastructure sectors. In particular, in the energy sector of Mongolia. This system detects malfunction or failure in the energy system by overseeing the system online, monitors how the sources support each other, and provides possibilities for fewer accidents. Therefore, it will enable operational security and protection from possible financial risks."