Fitch Ratings has revised the Outlooks on Mongolia’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) to Negative from Stable and affirmed the IDRs at ‘B+’. The Country Ceiling is affirmed at ‘B+’ and the Short-Term Foreign-Currency IDR at ‘B’. The issue ratings on Mongolia’s senior unsecured foreign- and local-currency bonds are also affirmed at ‘B+’.
Fitch says the Negative Outlook reflects the following risk factors that may, individually or collectively, result in a downgrade:Further deterioration of Mongolia’s external finances, such as a rise in net external indebtedness, or sustained declines in international reserves; a continuation of loose macroeconomic policy settings that leads to an intensification of risks to basic economic and financial stability; emergence of systemic financial stress such as a run on deposits, a further sharp rise in non-performing loans, and/or a flight out of the MNT into foreign currency; a marked increase in sovereign and quasi-sovereign external borrowing that calls into question fundamental foreign-currency solvency; and a sharp and sustained drop in prices for Mongolia’s main commodity exports.