E. Enkhjargal, chief representative
of the London office of the Mongol Bank, has said Mongolia may launch its debut
international bond early next year and the deal should total around USD500
million to USD600 million, maximum USD700 million. She told reporters on the
sidelines of a Mongolian investment conference in London late last month,
“We believe (the yield) will be around 5-6 percent.”

Mongolia earlier this year
shortlisted Deutsche Bank, Goldman Sachs, HSBC, ING and Morgan Stanley as
potential lead underwriters for its debut bond. It had indicated earlier that
the issuance could be for USD1.2 billion. The Central Bank advised the
government to issue a smaller bond, Ms. Enkhjargal said, adding, “USD1.2
billion is too big.”

Ms. Enkhjargal also said
foreign direct investment (FDI) into the commodity-rich  country is expected to be USD1.4 billion this
year, rising to USD3 billion in 2011. She said economic growth next year is
seen at 8 percent. Conference delegates were more bullish. Kevin Bortz,
director of natural resources at the European Bank for Reconstruction and
Development, told the conference the EBRD saw Mongolian GDP growth at 9 percent
next year. Ms. Enkhjargal said, “We are very conservative at the Central
Bank.”

While conference delegates
expressed concern at Mongolia”s high inflation rate of 11 percent, Ms.
Enkhjargal said the bank is targeting a single-digit rate in 2011. Mongolia”s
currency has been appreciating sharply — up 15 percent this year at 1,245 per
dollar. Growth in the economy has been driven by Chinese demand, and the
Central Bank has been acting to smooth volatility, Ms. Enkhjargal told the
conference, with FX reserves at a record USD1.8 billion. “We do not want
to see the MNT changing too much over a short period of time,” she added.