Bhutan Currency : Ngultrum

July 18, 2007

Bhutan Currency : Ngultrum

Bhutan use the barter system to do the trades and in 18th Century Bhutan first began to produce coins in silver, mainly for use in trade with the plains. These were followed by coins struck in alloyed silver, copper or brass, which were used for minor local purchases. These pieces, known as "Ma-trum" or "Chhe-trum" were struck by several local chieftains, rather than by the central government. Coin production continued into the 20th century under the reign of the first King, Druk Gyalpo Ugyen Wangchuck (1907-26), who gradually improved the quality of striking. In 1928/29, during the reign of the second King, Druk Gyalpo Jigme Wangchuck (1926-52), fine machine struck silver and copper coins were introduced into circulation, marking the beginning of modern coinage in Bhutan. However, throughout this period the use of coins remained limited, and barter remained the predominant means of carrying out transactions, and even government officials were paid in kind, rather than in cash. In the mid 1950's, during the reign of the third King, Druk Gyalpo Jigme Dorji Wangchuck (1952-72), the economy gradually started to become more widely monetized, with further issues of "silver" coins, using the dies of his father, but of a nickel alloy. In 1968, the Bank of Bhutan was established as a further step towards full monetization. By this time most salaries were paid in cash, rather than in kind.

Monetary reform commenced in 1974, during the reign of the present King, Druk Gyalpo Jigme Singye Wangchuck, with the issue by the Ministry of Finance of the first bank notes in 1974 coinciding with His Majesty's Coronation. The unit of currency was accordingly standardized with 100 Chhetrum being equal to 1 Ngultrum. In 1982 the Royal Monetary Authority of Bhutan (RMA) was established to act as the central bank of Bhutan. The RMA commenced its operations in 1983, when it assumed liability for all notes and coins previously issued by the Ministry of Finance.

Denomination of Banknotes and Coins in Bhutan
At present, notes in Bhutan are issued in the denominations of Nu.5, Nu.10, Nu.20, Nu.50, Nu.100 and Nu.500. The printing of notes in the denominations of Nu.1 and Nu.2 have been discontinued, and the Nu.1 denomination has been coined. However, such notes issued earlier which are still in circulation and are still legal tender.

Bhutanese Coins are available in denominations of Ch.5, Ch10, Ch.25, Ch.50 and Nu.1.

When the Ngultrum was introduced in 1974 the Bhutanese pegged it to the Indian Rupee and have the same face value with Indian Rupees : 1 NU = 1 RS. The Rate of Exchange against the USD Dollar is Approximately : 1 $USD= 40 NU.

In 2007, The New Clean Note of Bhutan has been circulated where Bhutan yet again changed the notes and Nu 1 notes has been reissued. RMA has also circulated the clean note policy where the new notes should have no damage or any ink or print on the it.