In the backdrop of plummeting forex reserves, Bhutan has decided to ban the import of all vehicles (except utility vehicles), agriculture machinery and heavy earthmoving machines.
The country is constantly grappling with mounting oil and grain prices caused by the combined effect of the Ukraine war and pandemics. Apparently, under the zero-COVID policy, Bhutan has barred foreign tourists for the past two years.

As per the data of the Royal Monetary Authority of Bhutan, Foreign exchange reserves had come down to USD 970 million at the end of December 2021. The same figure was USD 1.46 billion in April 2021.
The ministry of finance has reported that importing utility vehicles costing less than 1.5 million ngultrums (USD 20,000) would be allowed. Also, those for the use and promotion of tourism would be exempted from this order.

According to the government, the moratorium is enforced to ensure adequate foreign currency reserves for maintaining macroeconomic stability. As per media reports, Bhutan imported more than 8,000 vehicles till June, one of the main contributing factors to the depletion of forex reserves. It is to be noted that Bhutan is mandated by its constitution to maintain reserves to cover at least 12 months of imports.

The government is likely to review and amend the moratorium in six months. This will, however, depend on the foreign currency reserve position.