Mongolian Ministry of Foreign Affairs: Mongolia Hopes to Develop Relations with Japan While Maintaining Priority Ties with Russia and China

Mongolian Media: China’s Demand Outlook Will Determine Mongolia’s Economic Performance in 2026

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Foreign Minister Batmönkh Batzorig of Mongolia said in an interview with Japanese media that Mongolia regards its relations with Russia and China as the priority direction of its foreign policy, but plans to actively develop ties with Japan as one of its "third neighbors."

She emphasized: "Our relationships with our two neighboring countries (Russia and China) are the cornerstone of our foreign policy, while maintaining active relations with our third neighbor and practicing balanced diplomacy is also crucial."

Located between Russia and China, Mongolia has long pursued a "third neighbor" policy, under which Japan is regarded as a key partner.

She pointed out that one of the key cooperation projects with Japan is the Chinggis Khan International Airport, located not far from Ulaanbaatar. The airport was built with yen-denominated loans totaling 65.6 billion yen (approximately $410 million), and has been operational since 2021.

The Mongolian Foreign Minister also stated that cooperation with Japan in energy, agricultural product processing, education, and healthcare is equally important.

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Montsame News Agency, Ulaanbaatar, June 16 — Montsame, in collaboration with the Mongolian International Capital Company (MICC), provides readers with weekly summaries of Mongolia’s domestic capital markets and economic overview at the beginning of each week.

Mining Remains the Main Driver of Economic Growth

From January to April 2026, Mongolia's economy grew by 7.8% year-on-year, with mining sector value-added increasing by 30%, becoming the primary driver of growth. By sector, mining contributed 4 percentage points to GDP growth; services contributed 2.1 percentage points; agriculture and animal husbandry contributed 1.3 percentage points.

According to government projections, real GDP growth for 2026 is expected to reach 5.7%, while nominal GDP will surpass 10 trillion tugriks. International institutions generally anticipate that Mongolia’s economy will maintain stable growth of around 5% to 5.5% in the coming years—European Bank for Reconstruction and Development forecasts 5.5% growth; World Bank forecasts 5.0%; Asian Development Bank (ADB) forecasts 5.1% growth.

Mining will remain the core engine of economic growth, while the scale of coal exports and the outlook for Chinese market demand will be decisive factors determining Mongolia’s economic performance in 2026.

Foreign Exchange Reserves Exceed $7.7 Billion

As of the end of May 2026, Mongolia’s official foreign exchange reserves reached $7.73 billion, setting a historical high. This represents an increase of $727.8 million compared to the beginning of the year (a 10.4% rise), and $406 million higher than the previous month (a 5.5% increase).

The growth in foreign exchange reserves was mainly driven by increased revenues from mineral exports and the attraction of foreign currency resources by domestic commercial banks from international markets. Growth in copper and coal exports played a significant role in boosting foreign exchange inflows and strengthening central bank reserves.

Main Indicators:

· Official foreign exchange reserves reached $7.73 billion, a record high;

· Foreign exchange reserves can cover approximately 7.3 months of import needs;

· * Reserve size equals 275% of short-term external debt.

Mongolia’s foreign exchange reserve adequacy ratio now exceeds commonly used international benchmarks, enhancing its external payment capacity and financial stability. For instance, current reserves are sufficient to cover 5.3 months of imports for goods and services, providing a vital buffer against external market fluctuations and commodity price volatility. Although the current growth in foreign exchange reserves is largely due to rising export earnings, whether these reserves can remain stable in the future will largely depend on the performance of mineral exports and global commodity market trends.

Original article: toutiao.com/article/1868153311934731/

Disclaimer: The views expressed in this article are those of the author(s) and do not necessarily reflect the opinions of Montsame News Agency.