The Ngultrum (BTN) is the official currency of Bhutan, pegged at par with the Indian Rupee. Introduced in 1974, it replaced the earlier Tikchung and reflects Bhutan's deep economic integration with India.
Overview
The Ngultrum (symbol: Nu.; code: BTN) is the official currency of the Kingdom of Bhutan. It is subdivided into 100 chetrum. The Ngultrum is pegged at par (1:1) with the Indian Rupee (INR), and the Indian Rupee is accepted as legal tender throughout Bhutan — a reflection of the extensive economic ties between the two countries.
History
The Ngultrum was introduced in 1974, replacing the Bhutanese Tikchung.[3] Prior to the introduction of a modern currency, Bhutan's economy relied on barter and various historical coinage. The establishment of the Ngultrum was part of the broader modernization of Bhutan's economy under the Third and Fourth Kings.
The Royal Monetary Authority[4]
The Royal Monetary Authority of Bhutan (RMA), established in 1982, serves as the country's central bank. It is responsible for issuing the Ngultrum, managing foreign exchange reserves, regulating the banking sector, and overseeing monetary policy.
Denominations
Banknotes are issued in denominations of 1, 5, 10, 20, 50, 100, 500, and 1,000 Ngultrum. Coins are issued in smaller denominations. Bhutanese banknotes feature portraits of the Kings of Bhutan and images of important dzongs and landmarks.
Peg to the Indian Rupee
The fixed peg to the Indian Rupee reflects the reality that India is Bhutan's overwhelmingly dominant trading partner, and that much of Bhutan's revenue comes from hydropower exports to India priced in Rupees. While the peg provides economic stability and reduces transaction costs with India, it also means Bhutan has limited independent monetary policy.
Banking
Bhutan's banking sector includes:
- Bank of Bhutan (BoB): The oldest and largest commercial bank, established in 1968
- Bhutan National Bank (BNB): The second major commercial bank
- Bhutan Development Bank Limited (BDBL): Focused on rural and development lending
- T Bank: A newer private bank
- Druk PNB: A joint venture with Punjab National Bank of India
References
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