20 January, 2010 - When Lopon Leki pulled out a 100-rupee note yesterday afternoon to pay for lunch, colleague Tshering Penjore literally snatched it from his hands. Tshering Penjore took that note and several more from Leki in exchange for ngultrums of the same amount.
He had gone to the bank around 10:30 am yesterday, hoping to get some INR (Indian rupees), but the exchange teller had nothing to give. “In fact, he said I might have to wait several days,” said Tshering Penjore, 55, who leaves next week for Bodh Gaya, India.
The banks are exchanging ngultrums for INR in bundles of Rs 10,000 a person, but whatever is taken out for the day is finished by 9:30 am. This is below the Rs 40,000 a person cap set by the royal monetary authority (RMA) two years ago.
At this time of the year, there is usually a surge in the demand for INR with Bhutanese, in the thousands, going on pilgrimage to Bodhgaya, Sikkim and to Nepal. Many also plan health treatment in winter.
With not much available at the banks, people have turned to RMA to meet their INR requirements. RMA took three million rupees from BoB to replenish their rupee stock yesterday, with it also becoming a point of rupee distribution.
“It’ll probably exhaust by the next morning,” said RMA’s currency officer, Namgay Tshering, adding that, in the past two weeks, it had given out more than Rs 3 million a day in cash to people going to India.
The RMA is expecting another consignment of INR 20 million from Phuentsholing in a mix of INR 50 and 100 denominations. This will be lifted from the neighbouring Indian town of Hasimara, 20 km from Phuentsholing. It is BoB’s deposit parked at Hasimara, which RMA will refund in ngultrums.
According to Deoraj Ghalley, who looks after reserve management at the RMA, INR reserves were low at the moment. This month itself, the government paid INR 2.8 bn as repayment for the Tala and Kurichhu to India, while earnings from hydropower were at around Nu 500 mn. “There are other inflows as well in aid and for the Punatsangchu project, but the figures will be known only at the end of the month,” he said.
In September 2009, the rupee reserve stood at 2,358.76 mn. This does not include the Rs 3 bn liability, which was given as standby credit by the government of India at an annual interest rate of five percent at the end of March. Bhutan took an additional Rs 2 bn overdraft from the state bank of India (SBI) at an interest rate of 9.2 percent. This overdraft was fully liquidated in September this year.
RMA expects another surge in the demand for INR in the next few weeks with the Throema Tshogkor to begin in Bodhaya on February 3. Bhutan has close to 5,000 throema practitioners.
