If what is transpiring across the border town of Phuentsholing is any indication, the signs definitely don’t bode well for the country’s economy.
Illegal trade of Indian Rupee (INR) has only ballooned and become more rampant. But what is more alarming is the rate one has to pay to get the limited supply of INR in the market. An individual has to pay Nu 106-108 to fetch INR 100 today, even though the Nu (Ngultrum) and INR are pegged to share an equivalent value.
The existing trade practices exhibit apparently as well that INR is having an edge over Nu in the town across the border in Jaigaon, India. The two different prices for a commodity say it all. For example, the MRP of a commodity in Jaigaon is INR 1,000. An individual can get the commodity at the same price if the modality of payment is in INR. However, one has to pay an extra six or eight percent over the MRP if the payment is in the local currency.
Further, exacerbating the situation are some Phuentsholing residents, taking advantage of the situation. It is easy as well. Avail a VISA card from the banks, sell the INR 15,000 monthly quota, and get a little extra cash in Nu.
No denying, the restrictive measures have been successful in reducing the outflow of INR. Commercial banks are more stringent now with restriction on issuing INR and operation guidelines having been put in place for INR transaction. But a concern is that whether we have really benefited? Have we?
If the present trend is anything to go by, aren’t we paying more than what we should actually? Aren’t the traders from across the border that are reaping the benefits? For instance, the disparities in the value of the two currencies have also helped the traders who come to the auction yard in Phuentsholing from places like Siliguri and Kolkata. These traders throng the illegal exchange counters with INR, exchange that with more of Bhutanese Nu, and buy goods from the auction yard. The more Nu they can buy with the INR at exchange counters, the more goods they can buy from the auction yard.
Now that is not the currency parity we are talking about!