KATHMANDU, SEP 18 -The government has increased the gold import quota by 5 kg, to 20 kg per day, for a three month period. The import quantity has been hiked, focusing on the upcoming festival and wedding season, during which the demand normally rises.
A board meeting of the Nepal Rastra Bank (NRB) on Monday decided to increase the quota. “Import quota has been increased by 5 kg, as the wedding season is starting immediately after the festivals,” said Bashkar Mani Gyawali, spokesperson of the NRB.
Normally, the demand for gold rises during festivals and the wedding season. According to gold dealers, despite the festival season, customers’ attraction toward the yellow metal is comparatively less this year, and traders have not bought the metal from the banks. This has resulted in gold stocks of over 300 kg in banks that are authorised to import.
Over the last three weeks, dealers have not bought the gold given the low demand, and fewer orders are being supplied by smugglers at cheaper rates than the pricing of the banks, a source said.
Normally each year, demand during the festivals and wedding season increases to over 40 kg a day, up from the normal demand of 25 kg to 30 kg. “As there was price hike, the business during Teej was not good this year,” said Suresh Man Shrestha, a member of the gold distribution committee of the Federation of Nepal Gold, Silver, Gem and Jewellery Associations.
He added that many customers rather had sold their gold for the escalating price during the Teej rush time.
Now with the biggest festival of the country starting soon, dealers are hoping that the demand will pick up from next week. Shrestha said that they had asked the banks maintaining the stocks to sell the gold to dealers at the old customs duty rate so that the price does not go up.
However, as per the dealers, banks that had imported gold at the old duty rate are only showing interest to sell the metal for a profit at the new customs rate.
Last week, the government increased the customs duty to Rs 5,200, up from Rs 3,600 per 10 gm. Earlier, with India increasing customs duty, Nepali dealers had demanded that the government increase the duty rate inline with India, and also increase the quota.
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