MONEY»
Shortfall fuels gold price
KATHMANDU, AUG 19 -
The price of gold on Thursday set a new record, touching Rs. 31,295 per ten gm following a shortage after commercial banks stopped supplying the yellow metal to traders. The short-fall in the market also fuelled illegal import from India.
Commercial banks involved in gold import had stopped supplying the precious yellow metal to traders recommended by the Nepal Gold and Silver Dealers’ Association (NEGOSIDA) since Tuesday. Nepal Rastra Bank (NRB) had asked banks not to release gold in the market until further proviso.
“We directed the banks to stop supplying gold in the market until the new proviso as we received complaints that gold was not reaching the real traders,” said a source at the NRB.
“Moreover, the price increment within last two days was not natural.”
The price of gold in the local market was higher by Rs. 2,000 per tola compared to the international price. NEGOSIDA, which sets the daily price of gold in the domestic market, said it was compelled to increase the price due to shortage and the hyped price of the gold imported from India.
“Per day, 20-25 kilos of gold are being imported from India illegally to take advantage of the shortage prevailing in the market,” said Tej Ratna Shakya, NEGOSIDA president. “We were asking the government to increase the import quota but instead of heeding our demand, the central bank directed the commercial banks to stop the supply in the market without any coherent reason.”
Shakya said NEGOSIDA had provided a detailed record of the last three months to the NRB about the distribution of gold to traders obtained from commercial banks. “NRB’s move is motivated by baseless complaints.”
Currently, ahead of Teej, Dashain and Tihar, the demand for the yellow metal has shot up to 30-35 kg per day. However, the market is dry and the demand is being fulfilled by illegally imported gold.
“The government should come up with a solution soon. Otherwise, around a capital flight of Rs. 34 million will keep going to India daily and that also within the crisis of Indian currency shortage,” said Shakya adding that the government has also been facing a loss of Rs.1 million revenue because of illegal import of around 20 kg of gold everyday.
Posted on: 2010-08-20 08:23
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