RMA

The Royal Monetary Authority (RMA) is Bhutan’s central bank. It manages monetary policy (constrained by the 1:1 ngultrum-to-rupee peg), regulates commercial banks and non-bank financial institutions, holds the country’s foreign exchange reserves, and operates the national payment system.

Because of the rupee peg, the RMA has limited independent monetary policy room — interest-rate decisions effectively follow the Reserve Bank of India. The RMA’s most visible policy instruments are the cash reserve ratio, statutory liquidity ratio, and prudential limits on bank balance sheets. The institution publishes a Financial Statement each March and an Annual Report covering each fiscal year.

See also: Chapter Six, Paradox #6, Paradox #24.