The primary role of the RMA is to formulate and implement monetary policy with a view to achieving and maintaining price and financial stability. Bhutan’s monetary policy is that of Exchange Rate Targeting - since the introduction of the Ngultrum in 1974, the Ngultrum has been pegged at par to the Indian Rupee, which serves as the nominal anchor.

Towards achieving the above objective, the RMA relies on Cash Reserve Requirement (CRR) on deposits to control the banking liquidity and credit growth in the economy. In addition, the RMA strives to ensure access to foreign exchange to meet our external obligations and trade needs.

However, the absence of vibrant money market instruments and pegged exchange rate systems has limited the independence of monetary policy operations.