The Central Bank of Mongolia published an update noting that Moody’s upgraded Mongolia’s long-term sovereign credit rating to B1 and revised the outlook to stable, while reaffirming the short-term rating at Not Prime. Moody’s attributed the upgrade to greater export diversification and stronger domestic demand that have reduced dependence on coal prices, with stable growth supported by rising copper exports and expanded exploration activity in gold and rare earth elements. The assessment also pointed to governance and institutional reforms, including prudent post-pandemic debt management, anti-corruption efforts, and an upcoming revision of the Development Bank Law, alongside expectations that government debt, while projected to rise as the fiscal deficit widens in 2025 amid weaker revenues, will remain comparable to peers as the government cuts non-essential infrastructure projects and curbs recurrent spending. Moody’s said a further upgrade could follow if non-debt capital inflows lift foreign currency reserves and reduce exchange rate risks while government debt falls and borrowing costs decline through increased domestic financing; it flagged potential downgrade pressure from rising loan financing needs, weaker capacity to meet payment obligations, or external financing shortfalls.
Central Bank of Mongolia 2025-10-17
Central Bank of Mongolia reports Moody’s upgrade of Mongolia’s sovereign rating to B1 with stable outlook
Moody’s upgraded Mongolia’s long-term sovereign credit rating to B1 with a stable outlook, citing export diversification and stronger domestic demand. The upgrade reflects governance reforms and prudent debt management, despite a projected rise in government debt due to a widening fiscal deficit. Further upgrades depend on increased foreign reserves and reduced exchange rate risks, while downgrade risks include rising loan needs and external financing gaps.