RMA to enhance INR stock next week

Special arrangement for pilgrims initiated 

Currency: The Reserve Bank of India (RBI) has considered the Royal Monetary Authority’s (RMA) request to enhance the INR stock in the country on a weekly basis.

Although the weekly requirement of INR in the country is Rs 250 million (M), officials from the Central Bank said the RBI has considered replenishing the INR stock with a smaller amount.

The governor of the Central Bank, Dasho Penjore said that  RBI has notified the new Rs 2,000 note is meant for circulation only in India. The new Rs 2,000 denomination notes are not allowed in countries like Nepal and Bhutan.

The RBI has just started to print the new Rs 500 notes. “So we have to rely on the Rs 100 notes,” he said. For the last one month, the RMA has received only Nu 35 million (M).

However, the governor said that in about three weeks time the Rs 500 notes will be made available.

The RMA, he said is in contact with the RBI on a daily basis. An attempt was also made to send a delegation to India, which the Indian counter part deemed unnecessary at this point of time.

This is because the RBI is bogged with issues at home.

Dasho Penjore, however, said that an arrangement has been made for Bhutanese pilgrims going to attend the Kalachakra in Bodhgaya. The Central Bank, he said, is trying to contact the tour operators organising the pilgrimages. The tour operator will be asked to accept Ngultrum from their clients and the Central Bank will extend the exchange facility to the operators.

The country’s INR reserve at Nu 31 billion (B) is considered historically significant. “We have adequate reserve but high denomination notes are in short supply,” Dasho Penjore said.

For those who have deposited the demonetised notes in the bank accounts, which are now frozen, the Government of India will issue a notification in a few days time. Officials from the RMA said that the Government of India has to communicate to the Royal Government before the accounts can be unfrozen, as the sources of the money has to be verified first.

“If there are any cause of suspicion, then we have to investigate,” the governor said. However going by the volume of demonetised notes collected from the entire country, amounting to Nu 1.68B, he said there could be very few incidences but not on a scale to raise any alarms. Of the Nu 1.68B, half of the amounts are deposited by the companies.

The critical level of INR cash stock has, in the meanwhile spawned distress among the business community, potato and mandarine businesses, pilgrims and frequent travellers to India, among others.

The RMA earlier has been extending the Ngultrum-INR exchange facility in Phuentsholing to vendors in Jaigaon. This is to build the confidence of local currency and curb the inflow of black money as well. However, this too had to be temporarily shut to meet local demand.

In Thimphu, at least 300 people gather at the RMA parking lot as early as 4am on a daily basis. But only 50 are issued with INR 5,000 on a lucky dip basis.

Sources said some members of the business community in Thimphu bring the same group of people every day to increase their chances of getting a token for INR. The source said that some elderly, planning to go on pilgrimage to Bodhgaya, can be seen crying in disappointment when they do not get tokens.

Some tour operators and taxi operators claim that the demonetisation has come as a big blow to regional tourism. “We get less visitors and bookings nowadays,” said a taxi driver, Wangdi.

Businesses whose bank accounts have been frozen are finding it difficult to roll their money.

The RMA expects the situation to normalise by the end the year.

Tshering Dorji

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