According to the National Budget FY 2020-21 report, the total foreign currency reserve in the country stands at around USD 1.24B (Nu 92.38B) as of March end this year. The accumulated reserve is adequate to cover almost two and half years of essential imports.
The convertible currency reserves constitutes of US dollars and Indian Rupees. Of the total reserve, the convertible currency reserve consists of around USD 922M, which is about 74 percent of the total reserve. The Indian Rupee reserve stands at INR 24.2B.
According to the Royal Monetary Authority’s monthly statistical bulletin, the total national reserve was USD 1.21B at the end of last year.
The National Budget FY 2020-21 report states that the accumulated reserve is adequate to cover almost one and half year of merchandise imports or two and half years of essential imports and fulfils the constitutional requirement on reserve adequacy.
The report also states that with the COVID-19 pandemic, there has been an increase in the purchase of essential medical and personal equipment and stocking of food items, which has put increasing pressure on Indian Rupee reserve for the financial year 2019-20 and 2020-21.
With increasing need of finances to combat COVID-19, the government is mobilising additional external resources both in form of grants and concessional borrowing. This is expected to help in adding to the reserves.
Tshering Zam
