Country Report Bhutan May 2011

Outlook for 2011-12: Monetary policy

The Royal Monetary Authority (RMA, the central bank) has no explicit monetary policy. Rather, it states that policy is confined to supporting the peg of Bhutan's currency, the ngultrum, to the Indian rupee. The RMA will continue to take the steps necessary to support the peg, including ensuring the availability of rupees on demand for exchange with the ngultrum and "sterilising any persistent growth in liquidity to forestall a possible build-up of inflationary pressures, a weakening of the balance of payments and a contingent effect on the financial market".

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