The Mongolian tugrik (MNT) is the legal tender of Mongolia in East Asia, it has been in circulation since 1925, when it replaced all other currencies in the country. It’s a fascinating currency with a rich history tied to the country’s nomadic heritage and evolving economy. In this comprehensive guide, we will talk about the Mongolian Tugrik, exploring its history, denominations, exchange rates, and its significance in Mongolia’s economic landscape.
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History of the Mongolian Tugrik (MNT)
The history dating the Mongolian Tugrik (MNT) dates back to the 13th century, when the Mongol Empire minted silver coins called “Mongol.” However, the modern Tugrik, as we know it today, was introduced in 1921 after Mongolia declared its independence from China. It is denoted as MNT, and is represented by the symbol ₮. Mongolian Tugrik is otherwise knows as Togrog
Over the years, the Tugrik has undergone various reforms and redenominations to adapt to economic changes. In 1993, a significant redenomination took place, reducing the value of the Tugrik by 1,000 times. This move aimed to stabilize the currency and simplify financial transactions. The central bank set parameters for the currency to be pegged with a minimum of 25% precious metals and 75% by goods with high liquidity. The currency was removed from circulation because of its low value. In 2020, the economy contracted by 5.3% due to the effect of the COVID-19 pandemic, and it was the highest form of contraction since the early 1990s.
Denominations of the Mongolian Tugrik (MNT)
The Mongolian Tugrik is available in various denominations, both in banknotes and coins. Banknotes are commonly issued in denominations of ₮1 ₮3, ₮5, ₮10, ₮20, ₮50, ₮100, ₮500, ₮1,000, ₮5,000, ₮10,000, and ₮20,000. Bills under ₮10 are no longer printed. The commonly used coins are and ₮500. The currency is maintained by the country’s central bank, the Bank of Mongolia, which was originally called Mongolian Trade and Industrial Bank, in 1954, it was renamed to Bank of Mongolia. The common currency exchange is USD/MNT.
Exchange Rate of the Mongolian Tugrik (MNT)
The exchange rate of the Mongolian Tugrik (MNT) fluctuates based on various economic factors, including global market trends, commodity prices, and domestic economic policies.
Popular currency conversion
Economy of the Mongolian Tugrik (MNT)
The Mongolian economy is heavily reliant on the extraction and export of natural resources, primarily mining. The mining sector plays a crucial role in generating foreign exchange earnings and driving economic growth. However, the economy is also vulnerable to fluctuations in global commodity prices.
To diversify its economy, Mongolia has been focusing on developing other sectors, such as tourism and agriculture. The government has also implemented various economic reforms to attract foreign investment and promote sustainable development.
Challenges Facing the Mongolian Economy
Commodity Price Volatility: The reliance on commodity exports exposes the Mongolian economy to significant risks from price fluctuations
Infrastructure Development: Mongolia’s vast territory and harsh climate pose challenges to infrastructure development, hindering economic growth and trade.
Corruption and governance issues: Corruption and weak governance can hinder economic development and deter foreign investment.
Conclusion
The Mongolian Tugrik is a fascinating currency with a unique history and a significant role in Mongolia’s economy. Anyone interested in doing business or travelling to Mongolia must understand the factors influencing its exchange rate and the challenges facing the Mongolian economy.
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