Coun­try’s ru­pee re­serve of INR 27.5-Bil­lion

Bhutan Times - - Home - Thin­ley Choda

As of Septem­ber this year the coun­try’s in­ter­na­tional re­serve po­si­tion was at USD 1.17-B, of which the ru­pee re­serve forms Rs.27.5-B, and USD 746.3-B which is a con­vert­ible cur­rency re­serve

Ngul­trum (Nu) is not a le­gal ten­der out­side the borders that’s why for­eign cur­rency re­serve is essen­tial for Bhutan. More than 80 per­cent of the coun­try’s im­ports are from In­dia thus for an im­port-driven coun­try, ru­pee re­serve is nec­es­sary.

In the first nine months of the year, the ru­pee re­serve was high­est recorded. How­ever, Novem­ber last year was recorded as the coun­try’s high­est ru­pee stock with the amount of Rs. 31-B.

Ac­cord­ing to the Royal Mon­e­tary Au­thor­ity’s (RMA) monthly sta­tis­ti­cal bul­letin, the to­tal re­serve is enough to fi­nance 13 months of mer­chan­dise im­port. Con­vert­ible cur­rency re­serve alone is ad­e­quate to fi­nance 50.8 months of im­port. How­ever, the ru­pee re­serve will meet 5.6 months of pre­em­i­nent im­port.

The sec­tion seven of the ar­ti­cle 14 of the Con­sti- tu­tion of the King­dom of Bhutan stated that a min­i­mum for­eign cur­rency re­serve that is ad­e­quate to meet the cost of not less than one year’s essen­tial im­port must be main­tained.

In the past, when the coun­try was hit with ru­pee short­age, the coun­try has sold con­vert­ible cur­rency to re­store the ru­pee stock. Com­mer­cial bor­row­ing in ru­pee was also backed by the coun­try’s con­vert­ible cur­rency re­serve.

The gov­ern­ment will, how­ever con­tinue to sell the con­vert­ible cur­rency re­serve as and when re­quired. Re­serves are also used to ser­vice ex­ter­nal debts. As of June last year, the coun­try’s out­stand­ing ru­pee debt stood at Rs.118B and con­vert­ible cur­rency debt was recorded at USD 663-m.

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