AKIPRESS.COM - Mongolia’s tugrik is seen dropping to a record low in the coming weeks as the price of copper, the country’s top export, tumbles.

The metal has fallen 16 percent over the last two months to a six-year low as a Chinese stock-market rout heightened concern that demand will ease. Asia’s largest economy accounts for almost half of global copper purchases and takes 85 percent of all Mongolian exports, leaving the nation exposed to slowing growth in its giant neighbor, reports Bloomberg.

The tugrik weakened 4.9 percent in the past month to 1,966 a dollar as of 2:09 p.m. in Ulaanbatar, data compiled by Bloomberg show. It fell to a record-low of 1,991.45 on March 25. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 peers, is up 5.6 percent in 2015.

“Given the U.S. dollar strength situation and the softness in copper prices, the tugrik could breach the 2,000 level” by August, said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd. in Singapore. “Given Mongolia’s correlation with Chinese growth, the tugrik will remain under pressure.”

China’s gross domestic product is forecast to increase 6.9 percent this year, according to the media estimate in a Bloomberg survey. That compares with 7.4 percent in 2014 and would be the least in more than two decades. A 30 percent plunge in the Shanghai Composite Index of shares in the past month is prompting concern the slowdown could be worse.

Copper fell 7 percent this week to $5,350.5 a ton on the London Metal Exchange. It could decline to as low as $3,800 after falling through the crucial long-term support level of $5,500 to $5,339, and this would lead to a re-pricing of the tugrik, according to a research note released Wednesday by ING Groep NV analysts including Tim Condon in Singapore.

Mongolian shipments of the metal rose 23 percent in the first five months of 2015 from a year earlier, official data show. Mineral exports accounted for 87 percent of the country’s overseas sales during the period.

“Lower copper prices equal lower royalties,” said Nick Cousyn, chief operating officer in Ulaanbatar at BDSec, the country’s largest brokerage. “So unless the government of Mongolia moves forward with more mega projects, the budget deficit will grow and the tugrik will be under additional pressure.”