KATHMANDU, Feb 12: Gold imports, in monetary terms, went up by 14.38 percent in the first six months of the current fiscal year as against the same period of last fiscal year fuelled by international price hike of the precious yellow metal and depreciation of Nepali currency.
The Trade and Export Promotion Center said that Nepal imported gold worth Rs 13.28 billion in the six-month period to mid-January as against Rs 11.61 billion recorded in the same period last year.[break]
Monetary value of gold imports galloped as yellow metal prices went up in the international market, and the value of Nepali currency weakened, making imports expensive.
Tej Ratna Shakya, immediate-past president of the Nepal Gold and Silver Dealers´ Association (Negosida), said import value of gold shot up by double digit during the six-month period even though daily imports of gold through formal channel remained unchanged at 15 kg.
The government has currently designated 23 commercial banks to import gold for domestic consumption. "As commercial banks are allowed to release 15 kg of gold a day, the import volume has remained constant. But we had to pay more for the same quantity of gold because of international price hike and depreciation of Nepali currency," said Shakya.
Gold price in the domestic market has gone up by around 10 percent this year compared to that of last year, according to Shakya.
Average gold price stood at Rs 58,000 per tola (11.664 grams) in the domestic market during the review period, up from Rs 53,000 per tola in the same period last fiscal year.
Traders said imports figure would have gone up drastically had the government increased the daily import quota when demand for gold shot up during wedding and festive seasons.
Gold demand drops
Demand for gold has dropped in the domestic market with the ending of the wedding season that started in mid-January. Traders said daily gold demand in the local market has now declined to 20 kg to 25 kg from around 40 kg during the wedding season.
Traders also said the daily demand for gold will go down to 10 kg to 15 kg in the next two months, as no major festivals and weddings fall during this period.
Tej Rantna Shakya, immediate-past president of the Nepal Gold and Silver Dealers Association (Negosida), said scarcity of gold could worsen in the upcoming wedding season as the government has tightened the noose to control smuggling of gold from northern borders, while gold released in the market by commercial banks was not sufficient.
"We have been requesting Nepal Rastra Bank either to allow us to import gold or increase the supply quota. But our request has fallen on deaf ears," said Shakya.
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