|
Bhutan Monetary System
The monetary system in the early 1990s was based on the
decimal-system ngultrum, which was established as the
nation's
currency and first used to keep financial accounts in
1974. Prior
to 1957, a nondecimal system using both Indian and
Bhutanese rupees
was employed, and the decimal-based rupee was the standard
currency
between 1957 and 1974. Since at least the eighteenth
century,
Bhutan had had its own coinage system, and the Indian
rupee also
freely circulated as a medium of exchange. Until the
1960s,
however, most financial transactions were carried out
using barter
arrangements. Although Indian rupee notes were used
extensively, in
1971 the government had to withdraw some 350,000
tikchung (a
Bhutanese coin worth half a rupee) from circulation
because of the
inconvenience of using them in large financial
transactions. In
1991 the Indian rupee continued to be legal tender in
Bhutan, and
the ngultrum was at par with it. The Reserve Bank of India
determined the exchange rate between the ngultrum and
other foreign
currencies. External transactions were handled by Bhutan's
Ministry
of Finance, which provided foreign exchange for most
currency and
capital transactions. The ministry also had approval
authority over
all capital transactions. Starting in 1985, the ministry
delegated
most foreign-exchange transactions to the Royal Monetary
Authority.
Data as of September 1991
|
