From USD 505M to USD 1.15B in twenty-eight months

Bhutan’s foreign-exchange reserves came closest to a crisis in late 2023. On the gross-international-reserves measure — the narrow, freely-usable holdings used for cross-period comparison — they bottomed at USD 505 million in October 2023, brushing the constitutional floor that requires a year of essential imports in the vault. The trough followed a post-Covid import surge and weak hydrology that slowed export receipts; it was the closest the country has come to a reserves crisis since the 2008 constitutional moment.

The recovery since has been real, if not a straight line. By February 2026 gross international reserves had more than doubled, to about USD 1.15 billion — rebuilt on tourism receipts, a sharp rise in remittances, and moderating imports.

Two measures, one vault. How large the cushion looks depends on what you count. The gross international reserves charted above (~USD 1.15 billion) are the narrow, freely-usable holdings. The RMA’s broader balance-sheet total — total foreign-currency financial assets, including IMF-related and longer-term holdings — runs higher, to about USD 2.11 billion, or roughly USD 2,718 per Bhutanese (about 71% of one year’s per-capita GDP). The trajectory here tracks the comparable gross series; the per-capita figure uses the broader one. Both are real; they answer different questions.

The constitutional reference is Article 14, Section 7 of the Constitution of the Kingdom of Bhutan, which mandates: “A minimum foreign currency reserve that is adequate to meet the cost of not less than one year’s essential import must be maintained.” The key word is essential — food, fuel, medicines, basic consumer goods — typically 30–40% of total merchandise imports. Even on the narrow gross measure, reserves now sit at roughly twice that constitutional floor.

One technical benchmark tells the other side. The IMF’s January 2026 Article IV consultation flagged that end-FY 2024/25 reserves equated to 5.2 months of imports against the Fund’s Assessing Reserve Adequacy (ARA) target of 7 months. The constitutional floor (~12 months of essential imports) is satisfied; the IMF technical benchmark was not. The cushion looks ample against one rule and short against another — depending on which shock you are insuring against.

The question for the next decade is whether the country uses the reserves cushion to fund the second-order infrastructure work that the next 20 years require, or holds the cushion in place as a defensive posture against an uncertain commodity-and-fiscal outlook.