Rupee crunch, consumerism and Bhutan

There’s a run on banks in Bhutan due to the rupee crunch.  The rupee is on par with the Bhutanese currency, the ngultrum, and has, until now, been equally accepted.  The trouble is, in part, due to soaring imports from India and a surge in private loans for cars and housing over the last few years; so says the Royal Monetary Authority.

Translated: consumerism’s grip is taking hold.

Business Bhutan has this comprehensive write-up, which begins: “Bhutan is perhaps facing the biggest economic problem in its history which can lead to a crisis anytime soon if appropriate measures are not taken with the Indian rupee shortage reaching unprecedented levels threatening to hold the Bhutanese economy at ransom.”

Here is another account:

“Thousands of Indian businessmen applied to close their accounts in the banks and withdrew the amount in Indian Rupee. There was a huge rush everywhere as the Central Bank announced in their directives that accounts which are closed on before 9th March may be settled in Indian Rupee. Therefore, there was so much hustle and bustle in the banks, especially in the border towns.  Indians came in scores and took their money worth millions (almost emptying the banks). ”

And Kuensel is reporting that software is being installed at banks in Bhutan to keep track of (and limit) currency transfer by Bhutanese of ngultrum to rupee.

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