“NO MONEY”, says Central Bank Governor

“After Losar, we simply had no money; people think that we have money and we are not releasing them. We are borrowing at 10 percent,” remarked the Governor of the Royal Monetary Authority of Bhutan, the Central Bank of Bhutan.

Daw Tenzin said that many fuel depots ran out of fuel yesterday. “So not to hold economy to standstill, yesterday also we borrowed 60 million from State Bank of India at 10 percent.”

The Governor said that Bhutanese should realise Rupee is a currency that needed to earned. “We cannot continue with unlimited Ngultrum convertibility into Rupee through the banking channel.”

According to the Governor private consumption has taken economy to the hole. How? The rupee shortage is mainly driven by the private consumption and expenses.  This, he said, is because of the easy availability of credit from the financial institutions.

As of December 2011, the outstanding Ngultrum loan from the banks has reached 46 billion.

The Governor said if the trend continues, no amount of hydropower will be enough to solve the Rupee shortage and as a measure the RMA will closely monitor the credit expansion of the financial institutions.

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