Monetary reform started in 1974, coinciding with the coronation of His Majesty the Fourth Druk Gyalpo Jigme Singye Wangchuck. Finance ministry issued the first Ngultrum notes.

Before the trade was monetised, barter system prevailed in the country. Rice, butter, cheese and wool were exchanged with other local produce.

Almost a decade later, the Royal Monetary Authority (RMA) was established in 1982 to act as a central bank of the country.

In the 18th century, first silver coins were produced mainly for trade with India and Tibet. Much later came alloyed silver, copper and brass coins. Coin production continued into the 20th century under the reign of the first Druk Gyalpo Ugyen Wangchuck.

Later, in 1928, during the reign of Second King Druk Gyalpo Jigme Wangchuck, fine machine-struck silver and copper coins were introduced, marking the beginning of modern coinage in the country.

In the mid 1950’s, during the reign of Third King Druk Gyalpo Jigme Dorji Wangchuck, trade slowly began to be monetised. In 1968, Bank of Bhutan was established, thereby fully monetising the economy.

Currently, notes in the country are issued in the denominations of Nu 1, Nu 5, Nu 10, Nu 20, Nu 50, Nu 100, Nu 500 and Nu 1,000.

“The first series of banknotes issued by the finance ministry and the Bank of Bhutan were all of the same size, which made it difficult for most of the rural population to differentiate it from one another,” RMA’s Rinzin Lhamu. RMA issued new series of notes in 2006 with different sizes, colour and design.

The new banknotes were issued to the public in early 2013 in denominations of Nu 50, Nu 20, Nu 10 and Nu 1. The banknotes with denominations of 10 and 1 were printed on hybrid substrate, a composite of core cotton banknote laminated with two thin transparent polymer sheet for enhanced durability and anti-soiling property.

By Thinley Zangmo