The decision, however, has drawn flak from gold dealers. [break]
They have objected to the decision, stating that allowing only the commercial banks to import and distribute gold will further raise prices in the market which is already seeing price rise disproportionate to international prices.
“We decided to open gold imports only through commercial banks to regulate the import. Gold dealers will now have to buy gold from the commercial banks,” Minister for Commerce and Supplies Rajendra Mahato said. He further added that Nepal Rastra Bank, central monetary authority, will make necessary guidelines on gold import.
Amid ballooning imports of gold and consequent impact on Balance of Payment (BOP), the government few months back had designated eight commercial banks to import gold and distribute it to gold dealers on the recommendation of three associations of gold and silver traders.
The government, however, completely banned gold imports after the political parties failed to forge consensus to extend the ordinance that allowed the government to increase customs duty on gold to Rs 470 from Rs 130 per 10 grams.
To ease supplies in the market after enforcing the ban, the government directed Nepal Rastra Bank to auction off gold from its reserves. The central bank, however, has stopped the auction following the unveiling of financial ordinance that raised import duty on the yellow metal to Rs 1,000 per 10 grams.
Tej Ratna Shakya, president of Nepal Gold and Silver Dealers Association, flayed the decision to distribute gold through commercial banks and warned that the move would further make gold dearer.
“This will raise gold price at least by Rs 2,000 per 10 grams as it would restrict supply of gold in the domestic market,” Shakya added.
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