The togrog, also known as the tugrik, is the official currency of Mongolia. The togrog is subdivided into 100 mongo, but no mongo-denominated coins or banknotes are currently in circulation. The lowest denomination now in circulation is the 10 togrog banknote. The currency was originally introduced in 1925 and is now issued by the Bank of Mongolia, the nation’s central bank. In 2010, the togrog was the fastest rising currency against the Australian dollar, gaining value of 15 percent over the course of the year.
Mongolia gained independence from China in 1921. Among the first actions of the new government was the establishment of a banking system and national currency. The lan was the first currency after independence and valued on par to the Chinese silver yanchaan. It also exchanged with the Russian ruble at 2 lan: 1 ruble. The permanent Mongolian currency, the togrog, was put into circulation in 1925, gradually entering into circulation via state employee bankrolls. By 1928, Mongolia’s precious metal reserves grew enough to put the togrog on the gold standard, marking the currency’s reliability.
The first central bank in Mongolia was established as a joint venture with the Russian government and was called the Trade and Industry Bank of Mongolia. This bank provided both central banking and commercial banking services. In 1954, the Soviet Union sold its shares in the bank to the Mongolian government. In 1991, the Bank of Mongolia was established as the sole monetary authority and central bank, creating a modern two-tiered national banking system. The Bank of Mongolia ensures the stability of the togrog and promotes development of the economy. Duties of the bank include issuing currency, formulating monetary policy, supervising commercial banks and acting providing banking services to the government.
Agriculture and mining make up the bulk of Mongolia’s economy. The country holds rich deposits of several resources, including gold, tin, copper, coal and tungsten. Most other industries in Mongolia are located around the capital city, Ulan Bator. Mongolia’s GDP has grown at a rate of about 7.5 percent since 2002, but still has a large trade deficit. Even though the economy is experiencing growth, Mongolia still suffers from a high poverty rate, averaging at 35 percent, an unemployment rate over 3 percent and annual inflation of 6 percent. However, analysts from Citigroup said in 2011 that Mongolia has some of the most promising economic prospects through 2050.