The world's worst performing currency right now is Mongolia's

By Leisha Chi
BBC Business reporter

image source, Mongol Bank
image captionTough times for the tugrik

Even Genghis Khan himself might find it hard to conquer this battle.

Mongolia's currency is on its longest losing streak on record as the government grapples to contain an economic crisis.

Back in 2011, a mining boom helped make it the world's fastest-growing economy with growth in gross domestic product of around 17.5%.

But the tugrik lost about 7.8% of its value this month, making it the world's worst-performing currency, says Bloomberg data.

It's been a rapid descent from grace for the central Asian nation, which neighbours China and Russia.

image source, Getty Images

The landlocked country has substantial untapped reserves of valuable minerals like gold, copper and coal.

But then commodity prices collapsed. And so did demand from China, which buys 90% of Mongolia's exports.

The government has since admitted that the country is "in a deep state of economic crisis".

Finance Minister Choijilsuren Battogtokh said in a nationally televised address last week that they weren't able to afford to pay civil servants or the military.

image source, Getty Images
image captionMongolia's economic policies are missing their mark among foreign investors

Debt crisis

Making matters worse has been the government's inconsistent approach to investment laws and mining agreements, causing many foreign firms to rush for the exit.

Foreign direct investment in Mongolia plummeted by 85% since 2011 to the first quarter of last year, according to the US State Department.

The populist Mongolian People's Party won power in elections earlier this year after the public lost confidence in the long-ruling Democratic Party over its mishandling of the economy.

However it looks like a hard road ahead for Prime Minister Jargaltulgyn Erdenebat.

Due to its cash shortage, Mongolia has borrowed massively and now owes dinosaur-sized interest payments of a debt load of nearly $23bn.

This has fuelled speculation that Mongolia could face a sovereign default or need a bailout.

Funnily enough, a delegation from the International Monetary Fund arrived in the capital Ulaanbaatar today.

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