After repeated demands from bullion traders, the central bank today increased the limit for gold imports to 20 kg from 15 kg per day, which will be in effect till the end of the current fiscal year.
"The central bank's move might ease supply, albeit negligibly," said Nepal Gold and Silver Dealers' Association (Negosida) president Tej Ratna Shakya, adding that the increased import limit is not sufficient to meet the current market demand which has been increasing.
Due to the wedding season, the current market demand stands at 40 kg per day, though rising prices had led to a decrease in demand by 25 per cent a couple of months back. But during the off season, the import limit of 20 kg per day, will be sufficient to meet demands, he added.
Traders have been asking the central bank to increase the daily import limit to 30 kg or open gold imports through Open General License (OGL) that could help meet the rising demand.
Last year, the government had banned the import of the precious yellow metal as excessive imports had bled its coffers of US dollars pushing the Balance of Payment (BoP) to a negative zone.
Apart from the traditional use of gold for ornaments, investors have lately seen gold as a new avenue for investment due to its price escalating in the international market which in turn has helped prices increase in the domestic market too.
Meanwhile, the central bank also called a meeting of bullion traders, bankers' association and the central bank today. "Due to the absence of the bankers' association, the meeting will be held again to discuss some practical problems being faced by traders lately," Shakya added.
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