In a recently released financial statement, the Royal Monetary Authority (RMA), Bhutan’s central bank, has reported a remarkable increase in its profit as of 30th April 2025, compared to the same period last year. According to the report, the Royal Monetary Authority’s (RMA) profit rose sharply to approximately Nu 5.4 billion as of April 2025, marking a significant increase from the Nu 1.74 billion recorded in the same period last year. This impressive growth underscores the central bank’s robust financial performance and highlights its prudent management of assets, strategic foreign exchange operations, and diversification of revenue streams.
The notable surge in profitability demonstrates the RMA’s continued commitment to optimizing its balance sheet, enhancing returns on its investments, and effectively managing risks in both domestic and international markets. This performance reaffirms the central bank’s pivotal role in maintaining financial stability while contributing positively to the national economy.
Key Drivers of Profit Growth
The impressive increase in profit is primarily attributed to higher income from foreign currency operations, gains from asset sales, and revaluations.
Foreign Currency Income and Expenses
Foreign currency operations continued to serve as the primary driver of the Authority’s overall earnings performance. As of April 2025, the Royal Monetary Authority (RMA) generated approximately Nu 3.26 billion in interest income from its foreign currency assets, representing a notable increase from the Nu 2.37 billion recorded during the same period in 2024.
Simultaneously, the RMA effectively streamlined its cost structure by reducing interest expenses associated with its foreign currency liabilities. Interest payments on these liabilities declined to around Nu 730 million in April 2025, down from Nu 910 million in April 2024.
This favourable shift between income and expenses has significantly strengthened the Authority’s net income from foreign currency operations, which rose to approximately Nu 2.53 billion, up from Nu 1.46 billion a year earlier. This substantial improvement underscores the RMA’s prudent and proactive management of its foreign currency portfolio, its strategic positioning in the global financial market, and its ability to generate sustainable returns while mitigating exposure to external risks.
The Authority’s performance in this area reflects its continued commitment to maximising returns on international reserves and reinforces its role in safeguarding the country’s financial stability through sound reserve management practices.
Local Currency Income Declines
While foreign currency operations delivered robust returns, income derived from local currency assets registered a notable decline during the same period. As of April 2025, the Royal Monetary Authority (RMA) recorded interest income of approximately Nu 713 million from its local currency investments, representing a significant decrease from the Nu 1.33 billion generated in April 2024.
This downward trend indicates a deliberate strategic shift in the Authority’s asset allocation, with comparatively lower reliance on domestic currency instruments and an increased focus on optimising returns through foreign currency operations and diversified income streams.
The reduced earnings from local currency assets also reflect the prevailing domestic interest rate environment and the Authority’s prudent approach to balancing risk and return in the domestic market. Despite the decline in local currency interest income, the RMA’s strong performance in foreign currency operations and other revenue sources more than offset this shortfall, ensuring sustained profitability and reinforcing the effectiveness of its overall portfolio management strategy.
This balanced approach demonstrates the Authority’s continued commitment to safeguarding Bhutan’s monetary and financial stability while maximising returns for the broader benefit of the national economy.
Total Interest Income
Combining income from both foreign and local currency operations, the RMA’s total net interest income as of April 2025 stood at about Nu 2.52B — a sharp increase from Nu 1.49B in April 2024. This demonstrates the Authority’s focus on optimizing its interest-generating assets and managing liabilities efficiently.
Other Income Sources Boost Profitability
In addition to its core interest income, the RMA reported substantial earnings from various other income-generating activities, further strengthening its overall financial position for the period ending April 2025.
Proceeds from strategic asset disposals contributed approximately Nu 1.13 billion, demonstrating the Authority’s proactive approach to optimising its asset portfolio and unlocking value from its holdings. In addition, the RMA realised gains of around Nu 1.08 billion from fair value adjustments, reflecting an upward revaluation in the market value of its financial assets in line with favourable market conditions.
Foreign exchange revaluations provided another significant boost, contributing about Nu 993 million in additional income. This gain highlights the Authority’s effective management of its foreign currency reserves amidst currency fluctuations and its ability to capitalise on movements in global exchange rates.
Miscellaneous income, which includes smaller revenue streams from various operational activities, added a further Nu 46.79 million. These gains were partially offset by miscellaneous expenses amounting to approximately Nu 26 million.
Taken together, these additional income streams resulted in total other income of approximately Nu 3.23 billion for April 2025, a remarkable increase compared to the Nu 564 million reported for the same period last year. This substantial growth underscores the RMA’s strategic focus on diversified income sources and its commitment to prudent and dynamic asset management.
The strong contribution from non-interest income activities further reinforces the Authority’s financial resilience and its ability to generate sustainable returns, supporting its overarching mandate to safeguard Bhutan’s monetary and economic stability.
Operating Expenses
Despite the higher income, the central bank also faced operational expenses. The cost of printing banknotes alone amounted to about Nu 29M, while staff salaries and wages totaled around Nu 229M. Administrative expenses stood at approximately Nu 100M.
Combined, the RMA’s total operating expenses as of April 2025 were about Nu 358M. The Authority’s ability to control costs, while increasing income from key operations, has been vital in achieving its strong profit growth.
Net Profit and Profit Distribution
After accounting for all income and expenses, the RMA’s net profit as of April 30th, 2025 stood at about Nu 5.4B, more than triple the Nu 1.74B profit reported in April 2024.
Following adjustments for revaluation reserves and other factors, the final distributable profit for April 2025 was Nu 3.55B — almost double the distributable profit of Nu 1.87B in April 2024.
This robust financial performance underscores the central bank’s effective strategies in managing its foreign currency reserves, asset portfolio, and cost structure, enabling it to deliver strong returns despite operational expenses.
Looking Ahead
The RMA’s robust profit position is a clear testament to its disciplined financial stewardship, effective risk management practices, and commitment to operational excellence. This strong financial performance not only demonstrates the Authority’s ability to deliver sustainable returns but also significantly reinforces its capacity to uphold Bhutan’s monetary stability and strengthen the country’s economic resilience in an evolving global landscape.
By maintaining a prudent approach to asset allocation, strategically managing its foreign exchange reserves, and diversifying its income streams, the RMA has positioned itself to respond proactively to both domestic and external economic challenges. This ensures that the central bank remains well-equipped to fulfil its core mandate of safeguarding Bhutan’s monetary and financial system.
Looking ahead, the Authority has reaffirmed its commitment to sound asset management practices aimed at maximising returns while preserving the safety and liquidity of its reserves. It will continue to implement forward-looking strategies that balance profitability with long-term financial stability, ensuring that it remains a trusted pillar of the nation’s economic framework.
Through these efforts, the RMA aims to contribute meaningfully to Bhutan’s broader socio-economic development, fostering confidence among stakeholders and reinforcing public trust in the country’s financial system.
By Sherab Dorji From Thimphu
