From USD 505M to USD 2.11B in thirty months

Bhutan’s foreign-currency reserves crossed the constitutional adequacy threshold from below in late 2023 and have not looked back. The trough at USD 505 million in October 2023 — driven by post-Covid import surge plus weak hydrology slowing export receipts — was the closest the country has come to a reserves crisis since the 2008 constitutional moment.

Recovery since has been steady. The reading at March 2026 is USD 2.11 billion — roughly four times the trough level, three to four times the constitutional minimum essential-imports floor, and per-capita USD 2,718 (71% of one year’s per-capita GDP).

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. The current reserves cover roughly 32 months of essential imports, or 18–20 months of total merchandise imports. Both are well above any conventional reserve-adequacy benchmark.

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 is 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 requires, or holds the cushion in place as a defensive posture against an uncertain commodity-and-fiscal outlook.