Kathmandu, October 1

The Ministry of Industry, Commerce and Supplies (MoICS) has approved Nepal Rastra Bank (NRB)’s proposal to raise the import quota of gold ahead of the festive season.

However, MoIC has sanctioned increasing the import quota of gold by only five kilograms per day against the central bank’s proposal to raise import quota of yellow metal by 10 kg per day.

This means that commercial banks will be allowed to import 25 kg of raw gold soon following NRB’s circular based on the decision made by MoICS.

“We were not in a position to substantially increase gold import especially amid weak balance of payments (BoP) situation,” informed Rabi Shankar Saiju, joint secretary at MoICS.

Informing that import quota of gold has been increased temporarily for up to mid-December targeting the upcoming festive and wedding seasons, Saiju said, “We will adjust the new import quota after mid-December as per necessity.”

Though NRB had written to the MoICS six months back proposing it to raise the import quota of gold, the government was under pressure to refrain from hiking the import quota amid constant appreciation of the US dollar and weakening BoP situation of the country.

Bhisma Raj Dhungana, executive director at the foreign exchange department of NRB, said that the central bank’s next board meeting will approve the decision to raise import quota of gold.

Based on the very decision of NRB, commercial banks can import 25 kg of gold every day on a turn-wise basis.

Meanwhile, local jewellers have expressed their dissatisfaction over the delay in raising import quota of gold. “The festive season is just a few weeks ahead while the market is facing severe crunch of raw gold. However, the government is dillydallying to raise the import quota of bullion,” said Mohan Sunar, president of Federation of Nepal Gold and Silver Dealers’ Association.

Similarly, jewellers also said that gold import quota of 25 kg per day is insufficient to cater to festive and wedding seasons, as the demand for the yellow metal exceeds 40 kg per day during such times.