Says Business Mongolia here.
Apparently, the rating agency doesn’t like the fact that Mongolia can’t really be counted on to keep the promises the previous government made to the Oyu Tolgoi investors. This kind of thing is not helpful in attracting new investment, much of which is needed to pull off the expected rapid growth of GDP.
Last time I blogged about these ratings was in March, when Mongolia succeeded in placing $600 million in government bonds. As I noted at the time, Mongolia’s S&P rating of BB- is “not investment grade”, or in less polite terms. “junk”.
Some investors still are willing to buy into Mongolia because they understand that the future may be much brighter than the past. But if the Mongolian government insists on telling everybody that they can’t be trusted, that might change.