The monetary system in the early 1990s was based on the decimal-system ngultrum, which was established as the nation's currency and first used to keep financial accounts in 1974. Prior to 1957, a nondecimal system using both Indian and Bhutanese rupees was employed, and the decimal-based rupee was the standard currency between 1957 and 1974. Since at least the eighteenth century, Bhutan had had its own coinage system, and the Indian rupee also freely circulated as a medium of exchange. Until the 1960s, however, most financial transactions were carried out using barter arrangements. Although Indian rupee notes were used extensively, in 1971 the government had to withdraw some 350,000 tikchung (a Bhutanese coin worth half a rupee) from circulation because of the inconvenience of using them in large financial transactions. In 1991 the Indian rupee continued to be legal tender in Bhutan, and the ngultrum was at par with it. The Reserve Bank of India determined the exchange rate between the ngultrum and other foreign currencies. External transactions were handled by Bhutan's Ministry of Finance, which provided foreign exchange for most currency and capital transactions. The ministry also had approval authority over all capital transactions. Starting in 1985, the ministry delegated most foreign-exchange transactions to the Royal Monetary Authority.
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