Curbing gold import vital: Traders
KATHMANDU: Gold traders predict that even after the hike in customs duty on gold import, the consumption of gold in the domestic market might rise to 20 tonnes by the end of the current fiscal year if the government fails to apply effective control measures. In the last fiscal year, the total gold consumption in
the domestic market was six tonnes but according to recent data the total gold consumption is already 13.5 tonnes in
the home market.
Outlining the present market scenario, Nepal Gold and Silver Dealers’ Association (NEGOSIDA) president Tej Ratna Shakya said, “As the investment sector is not doing well, buyers here are more interested in holding gold. This has resulted in heavy gold trading this fiscal year, with around 50 per cent of the traded gold kept as holdings.”
On March 14, the cabinet decided to raise the customs duty on gold import by Rs 340 per 10 gram. Now, the new customs duty on gold is Rs 470 per 10 gram. The increased customs duty is targeted at controlling the excess of gold import and curbing gold smuggling although traders say that existing shortage of Indian currency here can again encourage
gold smuggling. Therefore, Nepal Rastra Bank should
increase the IC flow to prevent black marketing.
Currently, there is no gold import in the country but it has not created a gold scarcity in the market. Shakya said the market is in off-season phase. There is no great demand for gold and the trading is below 10 kg per day, which is reasonable.
“ There must be balance between IC and dollar as shortage of IC may spur black marketing and trigger a hike in the price of gold,” said Shakya.