|They came in scores to do their last transactions|
As reported in the media today, thousands of Indians swarmed the local banks the other day. In order to address the IC crunch had ordered all the banks to close the accounts held by non-residential Indians. Thousands of Indian businessmen applied to close their accounts in the banks and withdrew the amount in Indian Rupee. There was a huge rush everywhere as the Central Bank announced in their directives that accounts (savings, CD, FDR, RD, etc.), which are closed on before 9th March may be settled in Indian Rupee. Therefore, there was so much hustle and bustle in the banks, especially in the border towns. Indians came in scores and took their money worth millions (almost emptying the banks).
Seriously, this is a crisis in the making.
With the closure of accounts and settlement of account balances held by Indian nationals is a short-term solution. How would it ease the rupee crunch? I am not a financial expert, but my layman’s understanding tells me that with this decision, now more than ever we would have more demand for Indian currencies because until now only major construction companies had the need to pay their business counterparts in INR. But now even a pan-shop owner will need to make payments in Indian currency. That will have direct bearing on the number of Bhutanese who require rupee.
Now the business transactions across the border town will be limited to Indian currencies only. And Bhutanese shoppers will continue to buy goods from the border towns (as any sensible people would).
And soon I won’t be surprised if the prices of essential commodities shoot up. The cost of living will go up. Rents will skyrocket. Driving will be more expensive. Less and less people will be able to construct houses, adding fuel to housing crunch we already have. That’s when I see further inflation creeping in.
We are already feeling the pinch. Just to update you today Indian shopkeepers have started demanding payments to be made only in rupee. This way now even someone in the street, who earlier no need whatsoever to possess Indian currency, will now have more need for rupee. And that ultimately have direct bearing on the crunch.
Tomorrow is a new day and we pray something dramatic happen to rescue us all.