COVID-19 pandemic pushes cost of Indian rupee at Indo-Bhutan border: ReportPage Visited: 25
The open international border between India and Bhutan allows for free cross-border travel for citizens of these countries without a Passport
The COVID-19 pandemic has pushed up the cost of the Indian Rupee (INR) across the border in Bhutan, where it is now a “tradable commodity”.
The Bhutan Currency Ngultrum (Nu), pegged to the INR officially carries the same value. While the INR is legally accepted tender in the northern neighbour, the Nu is not officially accepted in India. But since India shares an “open international border” with Bhutan in West Bengal and Assam, the Nu is unofficially used in markets situated in border adjacent towns by Bhutanese buyers who usually pay in cash, traders told The Economic Times.
The unofficial practise has created business opportunity for agents who charge a 3-5 percent fee or ‘Batta’ to convert the Nu to INR. As per this, Nu 100 is exchanged for INR 95-97 – despite the official values being equal (pegged), the report noted.
Agents on their end deposit the Nu stock in Indian banks inside Bhutan via contacts and get it back in India from those contacts. However, the COVID-19 pandemic has increased this fee to 10-20 percent as Bhutanese buyers continue to frequent border markets despite the pandemic – continuing the inflow of Nu, traders told the paper.
Moneycontrol could not independently verify the report.
The open international border, under the Indo-Bhutan friendship treaty, allows for free cross-border travel between the countries for their citizens without a Passport. The hilly, jungle terrain border is also not fenced.
Shrikumar Bandopadhyay, IG, of the Sashastra Seema Bal (SSB) which guards the border told the paper that enhanced vigil by the group has made transport of bulk Nu to Bhutan difficult, which has increased its stock in India – thus also increasing the “exchange fee”.
First Published on Aug 22, 2020 02:40 pm