Fitch cuts Mongolia's rating to 'B'

ULAANBAATAR: Credit rating agency Fitch cut its rating on Mongolia by a notch to ‘B’ from ‘B-plus’, citing strained external liquidity, weak public finances, and deterioration in its growth outlook.

“The agency expects external liquidity to remain under pressure in 2016 due to a projected widening of the current-account deficit on the basis of weaker commodity exports and limited capital inflows,” Fitch said on Tuesday.

The ratings agency said it expected the north Asian country’s growth to slow to 1 percent in 2016, driven by continued weakness in consumption and a negative contribution from net exports.

Mongolia’s real GDP rose by 1.9 percent during the third quarter of 2015, decelerating from 9.3 percent a year earlier, Fitch said.

Fitch, however, raised its outlook on the country to ‘stable’ from ‘negative’, saying upside and downside risks to the rating are currently balanced.

Standard and Poor’s had also cut its rating on Mongolia by a notch to ‘B’ from ‘B-plus’ on Nov. 3.