𝐓𝐡𝐞 𝐄𝐛𝐛 𝐚𝐧𝐝 𝐅𝐥𝐨𝐰 𝐨𝐟 𝐁𝐡𝐮𝐭𝐚𝐧’𝐬 𝐄𝐜𝐨𝐧𝐨𝐦𝐲- 𝐓𝐫𝐚𝐜𝐢𝐧𝐠 𝐭𝐡𝐞 𝐓𝐫𝐚𝐣𝐞𝐜𝐭𝐨𝐫𝐲 𝐨𝐟 𝐄𝐱𝐭𝐞𝐫𝐧𝐚𝐥 𝐑𝐞𝐬𝐞𝐫𝐯𝐞𝐬

…𝒃𝒚 𝑶𝒄𝒕𝒐𝒃𝒆𝒓 2023, 𝒕𝒉𝒆 𝒓𝒆𝒔𝒆𝒓𝒗𝒆𝒔 𝒉𝒂𝒅 𝒔𝒆𝒕𝒕𝒍𝒆𝒅 𝒂𝒕 505.60 𝒎𝒊𝒍𝒍𝒊𝒐𝒏 𝑼𝑺𝑫, 𝒆𝒏𝒄𝒂𝒑𝒔𝒖𝒍𝒂𝒕𝒊𝒏𝒈 𝒕𝒉𝒆 𝒅𝒚𝒏𝒂𝒎𝒊𝒄 𝒏𝒂𝒕𝒖𝒓𝒆 𝒐𝒇 𝑩𝒉𝒖𝒕𝒂𝒏’𝒔 𝒆𝒄𝒐𝒏𝒐𝒎𝒊𝒄 𝒍𝒂𝒏𝒅𝒔𝒄𝒂𝒑𝒆

Phurpa Wangmo

Bhutan has been navigating through fluctuating tides in its external reserves over the past year. The figures, spanning from October 2022 to October 2023, provide a nuanced perspective on the country’s economic standing, reflecting both challenges and moments of resilience.

The journey begins in October 2022, where Bhutan’s total external reserves stood at a formidable 797.62 million USD. This marked the initiation of a financial landscape that would undergo intriguing shifts in the months that followed.
As the calendar turned, the nation experienced a gradual decline in its total external reserves. By January 2023, the figure had descended to 663.69 million USD, signaling a period of economic recalibration. This decline continued into February, with reserves touching 628.00 million USD, prompting a closer examination of factors influencing Bhutan’s financial stability.

A noteworthy rebound manifested in March 2023, where the total external reserves surged to 690.57 million USD. This resurgence was, however, short-lived, as the subsequent months witnessed a downward trend. By October 2023, the reserves had settled at 505.60 million USD, encapsulating the dynamic nature of Bhutan’s economic landscape.
Delving into the intricacies of foreign currency reserves, an integral component of the overall reserves, a parallel narrative unfolds. October 2022 witnessed a robust foreign currency reserve of 759.16 million USD, reflecting Bhutan’s strength in international transactions.

However, As per the monthly statistical Bulletin for December 2023 from Royal Monetary Authority, the subsequent months unveiled a gradual erosion of these reserves. By January 2023, the foreign currency reserves had diminished to 625.00 million USD. This downward trajectory persisted, reaching its nadir at 464.66 million USD in October 2023. The ebb and flow of foreign currency reserves mirror the challenges faced by Bhutan in maintaining stability in its external trade engagements.

A unique dimension is introduced through the Special Drawing Right (SDR) Holdings, a reflection of Bhutan’s participation in the global financial system. Commencing at 32.09 million USD in October 2022, the SDR Holdings experienced marginal fluctuations throughout the observed period. By October 2023, the figure settled at 34.19 million USD, showcasing Bhutan’s strategic engagement in the international monetary landscape.
Simultaneously, the Reserve Tranche Position in the International Monetary Fund (IMF) portrayed a consistent trajectory. Starting at 6.37 million USD in October 2022, it steadily increased to 6.85 million USD by April 2023, maintaining stability through October 2023. This resilient positioning indicates Bhutan’s commitment to collaborative financial endeavors on the global stage.

It is imperative to note that the format of external reserves underwent revision from 2010 onwards. The meticulous breakdown of items within the reserves, including Convertible Currency, Indian Rupee (INR), and Monetary Gold, emphasizes Bhutan’s transparency in portraying the composition of its financial assets.

Bhutan’s economic narrative, as narrated by its external reserves, is a tale of adaptability and resilience amidst a dynamically evolving global landscape. The challenges underscored by fluctuations in total reserves and foreign currency holdings are counterbalanced by strategic engagements reflected in SDR Holdings and the Reserve Tranche Position in the IMF.