Mongloian and other frontier market bank accounts to get higher interest rates?

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hsv
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Is it wise to put done of your money Mongloian and other frontier market bank accounts to get higher interest rates? For example if you put your money into Khan bank in Mongolia are the only risks the bank collapsing and there may not being deposit insurance (which there may be) and if the interest is paid in Mongolian currency, currency risks versus the pound? Also is it worth putting your money in high interest rate government bonds from frontier markets as well since they may offer over 20 percent interest?


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BobbyFlay
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Have you checked the relative inflation and inflation stability?
Inflation in Mongolia could be very inconsistent, constantly changing compared to other countries.
I'm not familiar with the Mongolian market, or any markets besides Western countries, to be able to comment on the market stability.
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TheRadUser
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Watch for inflation dude...
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Duncan2012
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That is almost certainly a bad idea. Interest rates are higher for a reason. If it was easy/safe everyone would be doing it.
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hsv
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(Original post by BobbyFlay)
Have you checked the relative inflation and inflation stability?
Inflation in Mongolia could be very inconsistent, constantly changing compared to other countries.
I'm not familiar with the Mongolian market, or any markets besides Western countries, to be able to comment on the market stability.
Interesting, though what I would like to understand is if you live in this country and have a savings account or government bond in Mongolia or another Frontier market how does Mongolian inflation affect me?


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Quady
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(Original post by hsv)
Interesting, though what I would like to understand is if you live in this country and have a savings account or government bond in Mongolia or another Frontier market how does Mongolian inflation affect me?


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The currency will weaken and when you convert to sterling you'll get less back.

To answer your question, remember the Icelandic banks?
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Fullofsurprises
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(Original post by hsv)
Is it wise to put done of your money Mongloian and other frontier market bank accounts to get higher interest rates? For example if you put your money into Khan bank in Mongolia are the only risks the bank collapsing and there may not being deposit insurance (which there may be) and if the interest is paid in Mongolian currency, currency risks versus the pound? Also is it worth putting your money in high interest rate government bonds from frontier markets as well since they may offer over 20 percent interest?


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The Tugrik/Pound exchange rate seems to be in fairly steady freefall, so a few years ago, 1m Tugrik was worth £500 and now it's only worth £340, so the interest rate is probably of limited value as your money is busy devaluing in the bank in the meantime.
https://www.google.co.uk/webhp?sourc...xchange%20rate
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