Mongolia is a landlocked country situated in East Asia. It is highly dependent on agriculture as the major economic activity. Between 2002 and 2003, the country experienced tremendous economic growth as a result of increased copper and gold production. However, the country is also highly dependent on the neighboring countries such as China and Russia. The financial sector in Mongolia is growing at a rapid rate with the Central Bank of Mongolia controlling the financial activities through several means including investing in the SME sector to encourage private sector investment. The country’s currency has been gaining value against the US dollar making it a strong hub for investment, especially for the neighboring China and Russia. The mineral deposits in the country have attracted Foreign Direct Investment which has helped develop the banking and financial sectors.
History of the Mongolian Tugrik
The Mongolian Tugrik /tögrög was introduced in 1925 to replace the Mongolian Dollar at a rate of one Soviet ruble, with 1 tugrik equaling 18 grams of silver. The tögrög is denoted as ₮ and abbreviated as MNT under the ISO 4217 currency code. The Mongo are no longer in circulation due to a reduction in their value and are normally issued to tourists as collectibles as novelties. Historically, the tögrög was subdivided into 100 Mongo. In 2010, the tögrög recorded the world’s highest increase in exchange rate against the USD at 15%. Due to the fall in investment and mining revenue, the rate is currently down by 24%. The importation of local and foreign currency in Mongolia has been limited to 815 Tugrik.
Coins and Banknotes
The first coins, mongo coins, were introduced in 1925 in the denominations ranging from 1 to 5 made of copper, 10 and 20 made of silver, and 50 was a mix of silver and copper. However, over the years the coins were minted from aluminum, bronze, cupronickel, and gold. The shape of the coins denotes the full moon in the Mongolian culture. Just like the coins, the tugrik notes resembled the Soviet ruble during the period of the Mongolian People's Republic. They were similar in terms of color themes, design, and they included the denominations ranging from 1 to 100 tögrög. The different denominations had different colors and symbols. 10, 20, and 50 Mongo were pink, yellow, and brown respectively with each having symbols of archery, wrestling, and horse riding, an important part of the cultures in the country. These denominations are no longer in use due to their low value against the US Dollar.
The Purchasing Power of Mongolian Currency
The current denominations have different purchasing powers such as the 10 tögrög can purchase water, 100 tögrög can purchase one lollipop, and 200 can purchase just a few sweets. 500 tögrög is the average fare paid on public transport, 2500 tögrög can afford the cheapest meal at the Tsai Nii gazar while 3500 tögrög is the average price for a packet of cigarettes. 20,000 tögrög would pay a taxi fare around the city center and 40,000 tögrög is the average price of accommodation in a tourist hostel in Ulaanbaatar.