Nepal's gold imports increase

Kathmandu, Aug 14 (IANS) Nepal's gold imports increased by a whopping 114 percent to 5,900 kg during fiscal year 2011-12, compared to import figures of the previous fiscal.

Value of imports increased by 150 percent to 25.77 billion Nepali rupees ($290 million) during the review period, thanks to the rise in imports. Nepal had imported 2,800 kg gold worth 10.72 billion rupees ($121 million) in 2010-11, reported Xinhua.

According to Tuesday's Republica daily report, the government has permitted import of 15 kg of gold a day through commercial banks from the last fiscal year, up from 10 kg a day in the previous fiscal year.

It, however, allowed banks to import 20 kg a day during February to July due to pressure from gold traders who argued that insufficient supplies had created black marketeering of the yellow metal in the market.

"Rise in imports and weakening of Nepali rupee against the greenback are the key reasons behind the whopping rise in gold import bill," Tej Ratna Shakya, president of Nepal Gold Silver Dealers Association, was quoted by the daily as saying.

In a bid to reduce growing trade deficit, the government had imposed ban on gold import between mid-August and mid-December in fiscal year 2009-10. Later, it imposed quota on gold imports, allowing designated banks to import and sell 10 kg gold a day.

According to traders, average daily demand for gold in the country hovers around 30 kg. If traders' statement is anything to go by, the country is facing shortage of 15 kg of gold a day.

"This shortage had triggered smuggling of the yellow metal from India, China and Bhutan," Shakya said, adding: "The government import quota cannot meet the demand in the market."