Inward foreign remittance grew significantly last year despite the Covid-19 pandemic effecting the global economy badly.
The Royal Monetary Authority (RMA) in one of its latest reports revealed that the country received a total USD 159.24 million (approximately Nu 11.7 billion) remittance in 2020.
This, according to the central bank, is an increase by 12.57 percent as compared to 2019.
Of the total inward remittance received through formal channels, 80 percent was from Australia. The remittance from the US and the Middle East constituted 10 percent and 2.5 percent, respectively.
The remittance inflow increased at a time when the US dollar had appreciated against the ngultrum. A stronger dollar bodes well for the recipients through conversion into the ngultrum.
According to statistics with the RMA, the monthly average exchange rate of the ngultrum jumped to 76.2 per dollar in April 2020 from 71.3 per dollar in January of the same year.
The exchange rate of the dollar against the ngultrum decreased slightly to 73.5 in October last year but the dollar appreciated to 74.3 against the ngultrum in November.
The RMA in the report said that in its effort to support and incentivise remittance during the Covid-19 pandemic, it opened an Australian dollar account with the Reserve Bank of Australia. This move is aimed at minimising the exchange loss remitter through currency conversions.
According to the RMA’s annual report 2019, the South Asia region has been the biggest beneficiary of remittance. However, Bhutan has lagged behind in capitalising the benefits although inward remittance is considered as a stable and reliable source of non-debt financing source for a country.
“Additionally, remittance inflow also helps in building foreign exchange reserves,” it states.
In order to encourage remittance in Bhutan, the government launched RemitBhutan platform in September 2016 to provide a platform for non-resident Bhutanese to remit their savings and earnings to Bhutan through the formal banking channel.