Gold Imports Jump to Rs19.25b in Q3
Nepal’s gold imports jumped 37 percent to Rs19.25 billion in the first nine months of the fiscal year as the government took measures to check smuggling of the yellow metal.
According to numbers released by the Trade and Export Promotion Centre (TEPC), imports totalled Rs14.05 billion in the same period of 2015-16.
Traders attribute the substantial growth in imports to stricter actions to control gold smuggling besides increased import quotas.
In mid-February, Nepal Rastra Bank (NRB) increased the daily import quota by 5 kg in view of swelling demand for the precious metal in the domestic market. Traders were allowed to import 20 kg of gold daily, up from 15 kg.
“This means a monthly increment of 150 kg of gold imports,” said Tej Ratna Shakya, former president of the Federation of Nepal Gold and Silver Dealers’ Association (Fenegosida).
Meanwhile, Nepalis seem to have become more interested in buying gold in the aftermath of the 2015 earthquake and Indian economic blockade, traders said.
Gold currently trades at Rs53,300 per tola. Considering recent market trends, this is a moderate price. The yellow metal had hit Rs60,000 per tola around two years ago.
“As the price is moderate, demand is a bit higher than normal. Plus people are buying gold due to the upcoming auspicious occasions,” Shakya said.
Another major gold trader in Kathmandu told the Post that tightened controls at customs points had contributed to the growth of gold imports through formal channels. “Customs on the Chinese side has been tightened. This has discouraged smuggling, and the result has been reflected in a rise in official imports,” he said.
Likewise, Shakya said, “Security agencies have increased surveillance after a 33-kg gold haul at Tribhuvan International Airport. Thus, illegal imports have been controlled to a large extent,” Shakya said.
Last January, the Central Investigation Bureau of the Nepal Police arrested three persons and seized 33 kg of contraband gold at the airport. The confiscated gold in the form of 244 biscuits, 18 chains and 11 rings had arrived from the UAE on an Air Arabia flight and passed undetected through customs. It was later seized at the outer gate of the airport.
According to a bullion trader, demand for gold currently stands at around 30 kg per day. Even though the government has increased the daily import quota to 20 kg, demand outstrips supply, which has fuelled illegal trade, he added.