Gold import ban jacks up domestic price

KATHMANDU: The ban since nine days on the import of gold has created internal scarcity of gold resulting in price hike of the precious yellow metal in the domestic market.

Gold is being traded for Rs 31,650 per tola that is higher than the international market price that is $ 1084 per ounce. According to Nepal Gold and Silver Dealers’ Association (NEGOSIDA) the domestic market price according to the international market price should be Rs 30,600 but it is Rs 1050 higher.

Nepal Rastra Bank (NRB) recently introduced new measures for importing gold. The decision was taken to reduce the import of gold so that the nation will not have to face shortage of dollars.

According to NEGOSIDA president Tej Ratna Shakya, the scarcity has been created after government blocked the import of gold since last Thursday. It is nine days that there has been no gold import. According to the Department of Commerce, ban on the gold import is to check and make necessary investigation regarding gold import. However, Shakya said that they do support the government in the task but would still like to urge the government to allow the import of gold. “Unless there is gold import in the market, government cannot make proper investigation,” added Shakya. Till mid-January, the total gold import was 12,635 kilos but since then there is no gold import. Around 10 tonnes of gold worth Rs 25 billion were imported during the first five months of the present fiscal year — mid-July to mid December, said Shakya. Previously, there used to be around six tonnes of gold consumption annually in the domestic market but it has now increased.

NRB has set a 40 per cent guarantee on import of gold. People are importing gold equal to over Rs 35 billion in a year. Last year, the total gold import in Nepal was worth Rs 35 billion..

As per NRB data, gold worth around Rs 60 billion is likely to be imported this year. Gold import was worth Rs 15 billion in Q1 of of the fiscal year 2009-10.