According to the data of Trade and Export Promotion Center (TEPC), Nepal imported gold worth Rs 21.5 billion in the first 10 months of the current fiscal while in the same period last year Nepal had imported gold worth Rs 7.74 billion only.[break]
The record of the first 10 months is double compared to the total imports of the last year. Nepal imported gold worth Rs 10.72 billion last year.
According to traders, the increase in the amount of import is mainly due to the increase in price but the volume of import has not increased much.
Tej Ratna Shakya, president of Nepal Gold and Silver Dealers´ Association (Negosida) said that though the data shows increase in imports actual quantity of import has remained almost constant.
"If we compare the price of the gold last fiscal year and this fiscal year, the price has gone up by around 25 percent. This is the reason why the data shows the increase in percentage of imports in terms of monetary value though not in volume," said Shakya.
Gold was traded at Rs 42,000 to Rs 45,000 per tola (11.664 grams) in the domestic market last fiscal year while the price hovered from Rs 45,000 to Rs 57,000 this year.
Gold price started to increase continuously in the domestic market from September 6, after it reached Rs 54,200 per tola mainly due to European debt crisis and strengthening of US dollar vis-à-vis Nepali currency.
Shakya said that the imports increased also because the government raised the limit for gold imports to the banks from 15 kg a day to 20 kg a day from February 22.
However, the traders say that increased import limit is not sufficient due to which gold is illegally being supplied in the market to meet the demand.
Currently, the demand of gold stands at around 25 kg to 30 kg a day as it is the wedding season. However, traders said the demand is low.
"Due to the increase in price most of the people are recycling the gold," said Shakya.
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