Monday, December 28, 2015

Foreign Currencies and Royal Monetary Authority of Bhutan.

Recently it was confirmed that dollar inflow into the Country from Bhutanese working  outside Bhutan has remained at the same level in the last 2 years.

If you look at the statistic of increasing number of Bhutanese going outside in search of work, the dollar inflow should have increased year by year. The stagnancy in the amount of inflow could be related to the disparity in the exchange rate. For example if a person deposits dollar into the Bhutanese Banks the counter value is Nu: 65 per dollar. But on the same day if a person has to buy dollars from the Banks , the Banks demand Nu: 67.15 for every dollar. Therefore the exchange regulation in Bhutan discourages dollar inflow/ transactions through official channel. Such disparity promotes black market.

In case RMA provides same exchange rate for selling or buying foreign currencies like dollars, I feel that there will be a steady increase in the inflow of dollar through the official channel. Why is it necessary to make the currency exchange service so expensively favouring the Banks?

1 comment:

  1. You certainly make sense here .... and the government should go all out to encourage inflow of the foreign exchange through banking channels .... This would have long term benefit to the country - given a number of issues that we face. A uniform conversion rate is one - infact I would even go as far as to suggest that there should be preferential treatment to remittances by overseas Bhutanese - such as waiver of tax on the amount for the recipient :)-

    Long time back we use to talk of "duty drawback" on exports that earn foreign exchange .... now the same principal could be applied to inward remittance of $$