…remittance in AUD declining while USD growing

Thukten Zangpo

The money sent by the Bhutanese abroad to the country has improved by over 130 percent at Nu 1.45 billion (B) or USD 18.29 million (M) in July this year compared with the same month last year.

This, according to the Royal Monetary Authority’s latest monthly bulletin, was an increase of Nu 844.35M.

About 80 percent of the total remittance received in July was denominated in USD. It accounted for Nu 1.15B or USD 14.43M.

Remittance from Australia accounted for only 8 percent in July. It was reported at Nu 114.26M or AUD 2.21M.

In the past, the remittance from Australia was the major contributor. Statistics show that AUD remittance contributed to about 50 percent of the total remittance in 2021, over 60 percent in 2020, and about 40 percent in 2019.

In the last seven months this year, the total remittance in USD improved—Nu 2.17B or USD 27.82M from Nu 1.78B or USD 24.26M compared with the same period last year.

However, the remittance in AUD declined to Nu 1.65B or AUD 31.28M from Nu 2.61B or AUD 45.89M in the same period.

An economist said that if more Bhutanese go abroad and pull their families and relatives along, this could lead to decline in inward remittance.

The central bank figure also shows that the total remittance in the first seven months this year saw a decrease by 7.67 percent compared to the same period last year.

The country received a total remittance of Nu 4.28B, equivalent to USD 56.41M in the last seven months from Nu 4.64B or USD 62.84M in the same period last year, a decrease of Nu 356.25M.

However, it has been improving compared to the last six months of this year to last year. The total remittance was down by 30 percent in the last six months.

Remittance helps to improve the foreign exchange reserves and reduces the deficit in the country’s current account by improving the balance of payments.

Remittances denominated in EUR was Nu 60.08M, Canadian Dollar at Nu 70.78M, Singaporean Dollar at Nu 124.23M, Japanese Yen at Nu 61.75M, and Pounds Sterling at Nu 32.57M.

To encourage the remittance inflow, the central bank increased cash incentives from 1 to 2 percent for inward remittance from June last year until December this year.

Under the scheme, the beneficiaries will receive cash incentives of 2 percent upon converting the remitted amount in ngultrum using the prevailing exchange rates through banking channels and international money transfer operators.