A slide in value that does not portend well for Bhutanese in Oz
Currency: Much to the annoyance of those Down Under, the Australian dollar, for the first time in about six years, fell below the Nu 50 exchange rate. As of yesterday, one AUD was Nu 49.20.
The AUD has not been below Nu 50 since mid 2009, and was stronger than the US dollar when one AUD reached as high as USD 1.10 staring late 2011, and a good part of 2012. Banks in Bhutan were selling the Australian dollar for Nu 58 and it was as high as Nu 61 in the informal market.
In 2013, the Bank of Bhutan, the largest bank in the country, recorded AUD 1.8M in remittances from Australia. This increased to a whopping AUD 5.2M in 2014.
As the preferred study destination for Bhutanese, because of the flexible visa rule that allowed students to work 40 hours a fortnight, and full time for dependents, more and more Bhutanese are leaving for Australia to study and work.
Apart from the development scholarships, hundreds of Bhutanese are studying in Australia. An exact number could not be ascertained, although applications for visa to study in Australia have increased by 220 percent, as of last year.
The sliding AUD is attributed to falling commodity prices and a stronger US dollar, according to Australian media reports. One online source said that the Australian dollar dipped below US 81,cents on Thursday in the wake of a surprise interest rate cut in Canada, which added to expectations the Reserve Bank of Australia would follow suit in a meeting on February 3. Bankers and experts expect the dollar to slide further against the USD, up to US 76 cents by the middle of this year.
The Australia and New Zealand Banking Group limited, commonly called ANZ, forecast that future interest rate cuts could push the currency lower.
The dollar’s drop in value comes as good news for Australian exporters, as it would boost exports, but for the Bhutanese in Australia, a weaker AUD means less money. “I should have changed mine,” said a corporate employee, who returned recently from Australia. “The rate there (money exchange) was Nu 51 for a dollar. I thought it’ll improve,” she said.
A student studying in Murdoch University, in Perth, Western Australia, said he sent around Nu 300,000 home recently. “I was waiting for the rates to improve to send some more, but I’m tensed now,” said the student.
Meanwhile, the ngultrum appreciated to 60.70 (bank buying rate) against the US dollar as of yesterday. This is the biggest improvement in more than a year. In June 2013, the ngultrum’s value dipped to 70 against the greenback. It improved to 58.2 soon after the ruling government in India, the Bharatiya Janata party (BJP), won a landslide victory in the Lok Sabha elections in May 2014.