Rumours that the Rupee problem would soon be solved has got the market there bullish
INR: Just as their Bhutanese counterparts, merchants in Jaigaon, adjacent Indian town to Phuentsholing, are also pinning their hopes on the newly elected government to solve the ongoing Rupee shortage issue in the country.
The merchants said their Bhutanese customers informed them that the Rupee problem was going to be solved in a few months and that businesses would become normal “just like before”.
“If this is true then it’s good news,” a cloth merchant said. “We were told the new government promised that their first priority would be to solve Rupee crunch.”
The shopkeepers have also been confirming and re-confirming the news with almost every Bhutanese customer who walked into their shops.
This is also probably the reason why they have accepting more Ngultrums as compared to before. Bhutanese shop in Jaigaon for clothes, mattresses, utensils, crockery, groceries and also visit the place to avail services from automobile workshop.
“Usually we increase price or refuse for discounts when paid in ngultrum, but these days we don’t argue much and have accepted the currency,” he said. “This is because we were informed that we might be allowed transaction with Bhutanese banks again.”
Today, the merchants who accept Ngultrums would exchange them with Rupees at 5-6 percent commission from unofficial exchange counters, as compared to almost 12 percent when the Rupee crunch first hit Bhutan.
With the limiting of Rupee from Bhutanese banks, Indian merchants said they earned about INR/Nu 5,000-10,000 in a day as compared to more than Nu 10,000 earlier.
Another merchant who sold mattresses said the exchange rate has also come down because they have access to INR from different Bhutanese sources, who are into money laundering.
“I think if your government wants to solve the problem, then they should first stop the money laundering business,” 35-year-old shopkeeper said. “Although we know this is illegal, we’re left with no option than to exchange from them.”
The merchants are hopeful that the Ngultrums they are accepting now will be exchanged with INR through a proper channel when the new government comes with some mechanism to solve this issue.
The merchants said that they had been struggling to sell their goods because to be able to fetch Rupees from Bhutanese customers, they had to increase the price. If increased, the customers opted out.
The trend of Bhutanese shopping from Jaigaon was there for decades because of goods available at relatively cheaper prices.
Jaigaon merchants then accepted Ngultrums because they had bank accounts with Bhutanese banks, where they deposited Ngultrums and later withdraw INR in a draft form.
Royal Monetary Authority then instructed all the banks in the country to close down accounts of about 3,500 merchants during which banks had to pay INR 1,352M between March 9-15 last years.
A few weeks back, an Indian political party member, during the campaign for local election in Jaigaon, was heard saying they would open a proper exchange counter if he was voted in so that Jaigaon merchants and Bhutanese business people continue enjoying good business together.
“These all are lies and we’re used to our politician’s false promises,” a merchant said. “We just hope it’s not the same with Bhutanese politicians.”
By Yangchen C Rinzin | Phuentsholing