Managing external reserves is one of the core mandates of the Royal Monetary Authority of Bhutan as stipulated under Section 108 of the RMA Act, 2010 wherein the ownership and management of Bhutan's foreign reserves is delegated to the Authority. In order to achieve a defined range of objectives, RMA follows 3 guiding principles:

• Safety - To ensure the preservation of capital
• Liquidity- Provision of adequate liquidity to ensure that reserves are readily available to finance day-to-day official transactions and meet unforeseen needs; and
• Returns- Earning returns within tolerable risk limits

Prudent reserve management entails strategic decisions on investment and the allocation of Bhutan's foreign reserves to ensure sustained stability and growth over the long term.

Further, besides the Reserve Management, the Authority also formulates, implements, monitors and enforces the Foreign Exchange Rules & Regulations.