"We have decided to completely bar the imports from Friday and the decision will remain in effect till further notice," Ganesh Dhakal, joint-secretary at the Ministry of Commerce and Supplies (MoCS), told Republica.[break]
The ban has been enforced as per Article 3 of the Export Import (Control) Act 2056, which empowers the ministry to ban the import or export of goods to protect national interests.
Officials stated that MoCS took such a decision mainly on request from the central bank, as soaring imports of the yellow metal continued to put pressure on the country´s foreign currency reserves.
Nepal has been suffering a huge trade deficit, mainly due to multifold increments in imports compared to exports. Propelled by widening trade deficit along with slowing growth in remittances, the balance of payments has been in negative territory also since the first quarter of last fiscal year.
While a rapid rise in gold imports was one of the factors behind this state of affairs, Nepal Rastra Bank, despite controlling its supply, has been facing a tough time bringing the situation under control.
NRB has currently limited the supply of gold in the market to 10 kilograms per day. Despite that, import of the yellow metal had crossed Rs 39.4 billion over the first 11 months of last fiscal year.
Meanwhile, the foreign currency reserves of the country have declined to Rs 196.84 billion in mid-June, whereas the figure was Rs 224.19 billion in mid-July 2009. The reserves are still sufficient to finance merchandise imports for 8.1 months, NRB has reported, and clarified that the new step was mooted simply to check undue pressure on the reserves.
Related story
Import of expensive gold doubles to Rs 21.20 billion in seven m...
-1200x560-1779450784.webp)
