Bhutan has taken an important step in reshaping its financial administration after King Jigme Khesar Namgyel Wangchuck signed a royal decree granting the Gelephu Central Bank authority over monetary policy and reserve management.
The decision gives the Gelephu Central Bank powers to oversee key monetary matters, including decisions related to the management of national reserves. The move places particular importance on establishing clear policies to guide how these financial responsibilities will be carried out.
Under the new decree, decisions concerning the composition, size and management of reserves must be supported by policies covering several essential areas. These include risk management, custody, liquidity and accountability. Such requirements establish important considerations for handling reserves and ensuring that related decisions follow defined policy guidelines.
The emphasis on these areas highlights the importance of responsible reserve management. Decisions about the size and composition of reserves require careful consideration, while custody and liquidity remain essential parts of the overall management process. Accountability is also identified as a necessary element in overseeing these responsibilities.
However, the decree does not change the existing position of the Royal Monetary Authority. It will continue to hold its status as Bhutan’s national central bank.
The royal decree therefore grants the Gelephu Central Bank significant authority while maintaining the Royal Monetary Authority’s established national central bank status.