Bhutan Currency: Everything to Know About the Bhutanese Ngultrum

Bhutan’s currency, the ngultrum (BTN), plays a key role in the country’s economy and financial system. While Bhutan is a small Himalayan nation, its monetary policies and exchange rate arrangements impact trade, tourism, and regional stability. Understanding how the ngultrum functions helps travelers, businesses, and investors navigate financial transactions within Bhutan.

Official Denominations

The Bhutanese ngultrum (BTN) is issued in banknotes and coins, with various denominations for everyday transactions. Banknotes, the most commonly used form of currency, range from 1 to 1,000 ngultrum. Each note features intricate designs reflecting Bhutan’s heritage, including images of monarchs, religious symbols, and landmarks. The 1,000-ngultrum note prominently displays the Tashichho Dzong, a fortress housing Bhutan’s government.

Coins, though used less frequently in urban areas, remain in circulation for smaller transactions. They come in denominations of 1, 5, 10, 25, and 50 chhertum, with 100 chhertum equaling 1 ngultrum. Designs on these coins often depict the national emblem and Buddhist symbols. While still legal tender, inflation and digital payments have reduced their practical use.

Peg with the Indian Rupee

The Bhutanese ngultrum is pegged to the Indian rupee (INR) at a fixed exchange rate of 1:1, ensuring stability in trade and financial transactions. India, Bhutan’s largest trading partner, supplies essential goods like fuel, machinery, and consumer products. The fixed rate eliminates currency fluctuation risks, helping businesses plan expenses predictably.

Tourism, a major economic driver, also benefits from this peg. Indian tourists, who make up a large share of visitors, can use Indian rupees interchangeably with ngultrum. However, ₹2,000 notes are often not accepted due to counterfeiting concerns. Travelers are advised to carry smaller denominations or exchange money upon arrival.

Royal Monetary Authority’s Regulation

The Royal Monetary Authority (RMA), Bhutan’s central bank, oversees financial institutions, manages liquidity, and ensures monetary stability. It controls inflation by adjusting interest rates and regulating the money supply. Given Bhutan’s exposure to global commodity prices and trade imbalances, the RMA closely monitors economic indicators to guide policy decisions.

To maintain stability, the RMA enforces banking regulations on lending, capital adequacy, and risk management. Bhutanese banks must comply to ensure sufficient reserves and prevent liquidity crises. The central bank also supervises non-banking financial institutions, including microfinance organizations and insurance companies.

Digital payments have become a focus for the RMA, with growing adoption of mobile wallets and online banking. The central bank has introduced policies to enhance cybersecurity, prevent fraud, and promote financial inclusion. Financial service providers must implement authentication measures and adhere to anti-money laundering (AML) standards to mitigate digital transaction risks.

Cross-Border Payment Relevance

Bhutan’s financial system is increasingly integrated with global markets, necessitating efficient cross-border payment mechanisms for trade, remittances, and investments. Given the country’s reliance on international development assistance and hydropower exports, the ability to process transactions in multiple currencies is essential. Bhutanese businesses require reliable banking channels to facilitate payments in USD, EUR, and other foreign currencies.

To streamline foreign transactions, the RMA has implemented policies to enhance efficiency while mitigating risks related to exchange rate fluctuations and financial crime. Compliance with global AML and counter-financing of terrorism (CFT) standards ensures Bhutan’s financial sector remains connected to international banking networks. This includes adherence to Financial Action Task Force (FATF) guidelines and Know Your Customer (KYC) requirements for cross-border transfers.

Exchanging Bhutan’s Currency Abroad

The Bhutanese ngultrum is not widely accepted outside Bhutan. Unlike major currencies such as the US dollar or euro, it is not freely convertible in international markets. Travelers must exchange remaining ngultrum before departure, as most foreign banks and exchange counters do not accept it. Even in India, where the ngultrum is pegged to the rupee, it is generally not accepted outside border towns.

To facilitate currency exchange, Bhutanese financial institutions convert ngultrum into major foreign currencies, primarily US dollars and Indian rupees. The RMA regulates these exchanges to ensure fair conversion rates and prevent shortages. International travelers are advised to carry US dollars or Indian rupees for easier exchange, as availability may vary by bank or exchange counter. While digital payments are increasingly accepted in urban areas, cash remains essential in rural regions, requiring visitors to plan accordingly.