What Is the MNT (Mongolian Tugrug)?

MNT is the currency code for the tugrug, which also goes by tögrög or tugrik. It is the official currency of Mongolia, using symbol is ₮, but sums are often written as “Tg” followed by the number, such as Tg 590. ₮1 can be subdivided into 100 möngö.

The Bank of Mongolia issues and manages the currency. As of August 2020, 1 U.S. dollar is equal to roughly 2,850 MNT.

Key Takeaways

  • The Mongolian tugrug (MNT) is the official national currency of Mongolia since 1925.
  • The country maintains fairly strict capital controls, limiting the amount of tugrug allowed out of the country, as well as how much can be converted into foreign currency.
  • The currency float freely and has seen its value erode over the past decades relative to major world currencies.

Understanding the Mongolian Tugrug

MNT debuted in December of 1925, after a resolution from the Bank of Mongolia. The Bank of Mongolia occasionally intervenes to maintain stable exchange rates with foreign currencies, but generally follows a floating exchange rate policy.

The tugrug replaced the Mongolian dollar and began exchanging at par with the Soviet ruble. In 1929 the MNT became the only legal currency in the country. The tugurg is composed of 100 möngö, or one-hundredth of a tugrug, but after decades of high inflation, möngö are now too low in value for practical use as currency. Presently MNT banknotes range from 10₮ to 20,000₮ and coins from 20₮ to 500₮.

The tugrug has long been losing value in the foreign exchange market. In 2008, $1 was worth approximately 1,150 tugrug. In 2020, that same $1 is worth approximately 2,850 tugrug

The tugrug is the official currency for shares listed on the Mongolian Stock Exchange (MSE), which captured attention in the second half of the first decade of the 21st century for its exponential growth from 2006, when it was the smallest world stock market by capitalization to 2011 when it peaked. Soon after, the MSE tumbled when foreign investment fell and China reduced its imports from Mongolia.

Mongolian Currency Restrictions

The government of Mongolia heavily restricts the import and export of local and foreign currency through capital controls. The import of local currency is limited to 815 tugrug, and the import of foreign currency is limited to the equivalent of US $2,000. In either case, travelers may only export as much currency as they declared upon arrival in the country.

Inside Mongolia’s borders, all prices must be denominated in ₮ and paid in MNT. The Bank of Mongolia and the Financial Regulatory Commission have the authority to waive this restriction for specific transactions. Transactions that cross the Mongolian border are not bound by this rule and may be settled in foreign currency.

Travelers may prefer to exchange foreign cash at banks or hotels and withdraw from their accounts via ATMs, which offer competitive exchange rates. Mongolia is still largely a cash economy, and foreigners used to swiping their card for every transaction may need to get used to keeping cash on them.

Key Takeaways

Unless there is a superseding tax treaty, Mongolia applies a 20 percent withholding tax to all interest payments generated by foreign-held interest bearing dollar accounts.