Skip to main content

A Crisis is brewing


They came in scores to do their last transactions  
As reported in the media today, thousands of Indians swarmed the local banks the other day. In order to address the IC crunch had ordered all the banks to close the accounts held by non-residential Indians. Thousands of Indian businessmen applied to close their accounts in the banks and withdrew the amount in Indian Rupee. There was a huge rush everywhere as the Central Bank announced in their directives that accounts (savings, CD, FDR, RD, etc.), which are closed on before 9th March may be settled in Indian Rupee. Therefore, there was so much hustle and bustle in the banks, especially in the border towns.  Indians came in scores and took their money worth millions (almost emptying the banks).

Seriously, this is a crisis in the making.

With the closure of accounts and settlement of account balances held by Indian nationals is a short-term solution. How would it ease the rupee crunch? I am not a financial expert, but my layman’s understanding tells me that with this decision, now more than ever we would have more demand for Indian currencies because until now only major construction companies had the need to pay their business counterparts in INR. But now even a pan-shop owner will need to make payments in Indian currency. That will have direct bearing on the number of Bhutanese who require rupee. 

Now the business transactions across the border town will be limited to Indian currencies only. And Bhutanese shoppers will continue to buy goods from the border towns (as any sensible people would).
And soon I won’t be surprised if the prices of essential commodities shoot up. The cost of living will go up. Rents will skyrocket. Driving will be more expensive. Less and less people will be able to construct houses, adding fuel to housing crunch we already have. That’s when I see further inflation creeping in.

We are already feeling the pinch. Just to update you today Indian shopkeepers have started demanding payments to be made only in rupee. This way now even someone in the street, who earlier no need whatsoever to possess Indian currency, will now have more need for rupee. And that ultimately have direct bearing on the crunch.

Tomorrow is a new day and we pray something dramatic happen to rescue us all. 
Labels:

Comments

  1. AnonymousMarch 11, 2012 at 2:38 PM

    Everything u say here is true.

    I came back without shopping after every shopkeeper of Jaigoan started asking IC. Our ngultrum is just a paper in their areas.

    ReplyDelete
  2. The WriterMarch 26, 2012 at 1:34 PM

    Good piece. Why not evaluate Nu against Rs and stop these charades once and for all! After all it's people at the lower rung whose going to be affected the most.

    ReplyDelete

Post a Comment

So what do you think?

Popular Posts

When they are ready

The Ministry of Education discovered 890 'underage' children admitted in schools across the country in 2019. Thus, the ministry in May 2019 issued a notification revoking the admission for these children.  Majority were in urban centres.  Desperate, parents and the affected schools requested the government to intervene. They also requested the government to consider lowering the enrolment age to five years.  Currently, in Bhutan a child can legally go to school only when s(he) is six years old.  And that policy was strictly followed a few years ago to the extent that some schools refused to admit children even if they were short of a few weeks. So, parents, mostly in urban areas, resorted to faking their children's ages. Many parents were guilty of adding years onto their children's actual ages. However, most parents, we are told, managed to correct their 'mistakes' later.  Faking a child's age was rampant...
2 comments
Read more...

The Vanishing Currency of a Bhutanese Village

Growing up in rural Bhutan, the richest people in the village often had very little cash. They were known as chukpo , 'the ones with cattle'. And no one asked how much money a person had in the bank. No one or only a countable few had bank accounts, anyway. Wealth was measured in fields, cattle, grains, and the ability to carry a family through the seasons. Cash existed, but it played only a small role. Most exchanges happened through barter. Rice for chillies, soya beans for Sichuan peppers, cheese for eggs. I still remember that a ball of homemade cheese was worth two fresh eggs. Nobody needed a calculator because people simply knew. The most remarkable part of the system was the exchange of labour. During sowing and planting seasons, families needed extra hands, yet labour was rarely paid in cash. If I spent three days helping on your farm, you spent three days helping on mine in return. No contract was needed to be signed. No money changed hands. Wealthier households so...
2 comments
Read more...

Community of Bhutanese Bloggers Conceived

And finally it happened. I must say that it was by far the most attended Bloggers Meet. In the past we had bloggers agree to attend and cancel at the very last minute. But on June 24, 2015 – almost 100% of bloggers, who confirmed came. I would like to thank everyone for keeping his/her words, especially those who had to come all the way from Wangdue or Paro. Thank you! 35 Bhutanese bloggers met in Thimphu. We were honored to have the presence of senior bloggers like Aue Yeshi Dorji and Dasho Sangay Khandu. The meeting assumed more significance because of their presence. Equally, we were happy to have many young bloggers in whom we see so much enthusiasm and potential. On top of many things that transpired during the Meet, one of the most significant outcomes was the unanimous decision reached to form a formal group of bloggers, a platform aimed at encouraging and inspiring more bloggers around the country. The members decided that we will call it Community of Bhutanese Blogger...
16 comments
Read more...