“Though, domestic gold price is dependent on international market price and exchange rate between the US dollar and Nepali rupee, today’s price hike is due to scarcity in the domestic market,” said said Tej Ratna Shakya, president of Nepal Gold and Silver Traders Association (Negosida).
The banks — on central bank’s ‘verbal directives’ — stopped the supply of the precious metal in the market leading to high demand.
“The central bank has asked the banks not to supply gold until further notice,” he said adding that the Nepal Rastra Bank (NRB) has suspected ‘misuse’ of gold. “Negosida has forwarded the total gold trading record, which has every detail of amount of gold traded and traders’ PAN number for last three months — Baishak, Jestha and Asad,” said the president of the association that has network in 35 districts in the country.
Earlier also, the central bank has directed the banks to sell only 10 kg of gold to traders. “But after the traders complained the central bank that it could not meet the market demand, the central bank had increased the amount to 20 kg,” he added.
According to Negosida, the demand of gold in the domestic market is around 35 kg. “However, we were managing with 20 kg, as it was not too less to meet the demand,” Shakya said adding that the recent ‘verbal directive’ of NRB to banks not to sell gold has adverse impact in the market swelling the price.
Shakya was surprised on the new development as the Monetary Policy 2010-11 has clearly stated that the gold could be imported as per the demand prescribed by the traders.
Meanwhile, Nepal Gem and Jewellery Association has also urged the central bank to direct banks to resume gold supply.
