Author Topic: Bhutan - running out of banknotes  (Read 1063 times)

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Offline Figleaf

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Bhutan - running out of banknotes
« on: September 19, 2010, 09:56:13 PM »
Cost exceeds worth
For denominations less than Nu 5, says RMA
By Phuntsho Wangdi, 18 September, 2010

The costs involved to print, transport and distribute currency denominations below ngultrum five is higher than the value of the note itself, say officials of the royal monetary authority (RMA).

For example, it cost almost 78 chetrum to mint a 25 chetrum coin, said RMA’s currency management director, Phajo Dorje.

At the annual meeting between RMA and financial institutions on Thursday, Phajo Dorje presented that it cost Nu 11.4M to mint 10 million pieces of Nu 1 coins and 25 chhetrum coins.

Likewise, it cost Nu 203M to print 105 million pieces of the 2006 series of currency notes. The order included printing 20 million pieces of Nu 1 notes, 15 million pieces of Nu 5, 10 and 100 notes, 10 million pieces of Nu 20, 50, 500 and 1,000 notes.

“These costs do not take into transportation, insurance and other costs,” said the director, adding that Bhutan does its printing of currency and minting of coins in Europe.

Phajo said that related costs being higher than the value of smaller currency denominations was common to many economies across the world. He also pointed out that the scale of economies did not apply the same way when printing currency notes.

Since 1974, Bhutan has printed currency notes of Nu 24 B and coins of Nu 17.5B.

Money in circulation, as on September 8, was Nu 5.8B. This does not include the money in the vaults of the RMA and the banks.

The director said that RMA had in stock about Nu 9B in fresh notes, which were mostly of Nu 1,000 denomination. “The stock for the other denominations have been depleted, that is why we have asked the banks to reconfigure their ATM machines,” said the director.

New notes of Nu 100, Nu 500 and Nu 5 denominations with the signature of the governor are expected by February 2011.

Source: Kuensel
An unidentified coin is a piece of metal. An identified coin is a piece of history.