Bhutan is at risk of a foreign exchange reserve crisis due to a drop in tourist numbers due to the coronavirus pandemic and high cost oil and gas imports due to the Ukraine-Russia war. Therefore, the country has banned the import of all vehicles except gas, water and electricity supply vehicles, heavy vehicles like excavators and bulldozers and agricultural machinery.
Yesterday Friday (August 19) a related notice was given by the government, according to the news agency Reuters.
Bhutan has a population of less than eight million. In the last two years, the number of tourists has decreased due to the zero covid policy of the government in the country due to the corona epidemic. Besides, since last February, the country’s import costs have increased several times due to the continuous upward trend in oil and gas prices in the world market.
According to a report published last month, the foreign exchange reserves in April 2021 were 1.46 billion US dollars. But in December it decreased to 970 million US dollars.
According to the country’s Ministry of Finance, vehicles which will cost less than 20 thousand US dollars to import and which will be used in tourism and development of tourism will be discounted.
It is mentioned in the notification that the temporary ban has been given to maintain stability in the macro economy.
Bhutan’s Quencell media reported that more than 8,000 vehicles were imported until June this year. This is one of the reasons behind the decline in foreign reserves.
According to the country’s constitution, there is an obligation to maintain foreign reserves for at least 12 months of imports.
The country’s finance ministry said that the import ban, which will be effective from Friday, will be revised after the next six months considering the condition of reserves.