Mongolia - Request for Stand-By Arrangement - Staff Report; Staff Supplements; Press Release on the Executive Board Discussion; And Statement by the Executive Director for Mongolia (Electronic book text)

1. Nature of the shock. Mongolia has been hit hard by the global financial crisis through a sudden and catastrophic drop in the price of its main export commodities, most notably copper. From its peak in mid 2008, the copper price has fallen by 60 percent creating severe imbalances in both the fiscal and external accounts. Mineral revenues, which accounted for more than one-third of budget revenues at the peak of the commodity boom in 2007, have fallen by 10 percent of GDP and are expected to account for only 12 percent of total revenues in 2009. Similarly, export proceeds are expected to fall by more than US$800 million this year-almost one-third of total exports-largely a result of lower prices for mineral and textiles exports.