Historical Sketch

Bhutan was founded in the 17th century when different valley communities decided to merge. They established a dual system of government in which the offices of spiritual leader (Je Khenpo or Dharma Rajah) and secular ruler (Druk Desi or Deb Rajah) were separated. In 1907, with British support, a centralized monarchy was established in which the dual government formally continued, but with the spiritual leader subordinate to the king. The British-Indian protectorate continued after Indian independence and formally ended in 1961. In the 1990s began political reforms which culminated in the abolition of absolute rule and establishment of a constitutional monarchy in 2008.

Monetary History Overview

Monetary economy arrived in Bhutan only in mid-20th century. Barter was widespread traditionally, and only few coins flew in through trade with the neighbours. The silver half rupees of Cooch Behar had developed into a kind of accounting standard. They were referred to as "Ma-Tam" (coins with "ma", a syllable prominent in the inscription). When the mint in Cooch Behar was closed at the end of the 18th century, the minting of the "Ma-Tam" continued locally. Their silver content quickly diminished to practically zero, creating a low-valued subsidiary coin. The establishment of the Bhutanese kingdom initiated a hesitant opening of the country. In 1909, the production of the "Ma-Tam" was commissioned in India, such that milled coins entered Bhutan for the first time. In 1928, new Bhutanese silver and copper coins were produced without denominations. They were referred to as "Che-Tam" ("half coin", an allusion to the Cooch Behar coinage) and "Zang-Tam" ("copper coin") and are likely to have been traded as half Rupee and quarter Anna of the Indian standard. The "Che-Tam" was re-issued in base metal in the 1950 and had definitely become equal to half an Indian Rupee. Modern finance arrived in Bhutan when the first commercial bank opened in 1968. In April 1974, the government began issuing paper money and coins, and the Bhutanese Ngultrum became the national currency. The then prevalent Indian currency remained in circulation, and the Ngultrum was on par with the Indian Rupee, and still is. In November 1983, the Royal Monetary Authority took over financial supervision and money issuance.

Bhutan joined the International Monetary Fund (IMF) on 28.09.1981.

Currency Units Timeline

Currency Institutes Timeline

Monetary History Sources