July 30: The lockdown imposed by the government to contain the spread of coronavirus and the increase in price of gold in the international market led to a drastic fall in import of the precious yellow metal during the last fiscal year.
According to the data maintained by the Department of Customs, the import of gold in FY 2019/20 was the lowest in the last five years. During the review period, Nepal imported gold worth Rs 13.46 billion, which is 61.11 percent less than the import in the previous fiscal year (2018/19) when the country imported gold worth Rs 34.61 billion.
Five years ago, the import of gold was worth Rs 16.7 billion.
In the recent years, Nepal had been importing gold worth Rs 30 billion in average every year. But this year, the import of gold declined to a great extent.
In terms of quantity, the import of gold declined by 68 percent in the review period compared to the previous fiscal year. In FY 2019/20, Nepal imported 7492 kg of gold while the import in FY 2018/19 was 1400 kg.
The country didn’t import any gold after the government imposed lockdown on March 24. Executive Director of Nepal Banker’s Association Anil Sharma told New Business Age that the country hasn’t imported gold after the lockdown was imposed. Banks have stock of 330 kg gold which was imported before the lockdown period. The banks have been supplying gold to the market as per the demand.
“Dealers have stopped buying gold due to the increase in price,” said Sharma, adding that hardly 1 kg of gold gets sold in a day.
He said that the banks will not import any additional gold until the stock is cleared.
The price of gold was Rs 60,000 per tola (11 grams approximately) by mid-July 2019. The price has increased to almost Rs 100,000 in about a year. Due to the increase in price of gold, the trade has slumped a lot. Gold dealers themselves have reportedly urged bankers not to import any more gold.