Bhutan bans import of most vehicles as foreign exchange reserves plummet

KATHMANDU:

Bhutan will ban the import of all vehicles except utility vehicles, heavy earthmoving machines and agriculture machinery to save dwindling foreign exchange reserves, the government said in a notice seen by Reuters on Friday.

Nestled between China and India, the country of fewer than 800,000 people is grappling with the effects of soaring oil and grain prices caused by the war in Ukraine as well as with the continued impact of the pandemic, including a strict zero-COVID policy that has barred foreign tourists for the past two years.

Bhutan will ban the import of all vehicles except utility vehicles, heavy earthmoving machines and agriculture machinery to save dwindling foreign exchange reserves, the government said in a notice seen by Reuters on Friday.

Nestled between China and India, the country of fewer than 800,000 people is grappling with the effects of soaring oil and grain prices caused by the war in Ukraine as well as with the continued impact of the pandemic, including a strict zero-COVID policy that has barred foreign tourists for the past two years.

“The moratorium is implemented to ensure adequate foreign currency reserves for maintaining macroeconomic stability,” it said.

The daily Kuensel newspaper said Bhutan imported more than 8,000 vehicles in the year to June and that this was one of the main contributing factors to the depletion of reserves.

Bhutan is mandated by its constitution to maintain reserves to cover at least 12 months of imports.

The government will review and amend the moratorium which went into effect on Friday in six months depending on the foreign currency reserve position, it said. Reuters