KATHMANDU,
The central bank has been resisting continued pressure from bullion traders to increase the quota. Only commercial banks are allowed to import gold .
While the central bank is concerned that a hike in the quota
Showing posts with label Gold. Show all posts
Showing posts with label Gold. Show all posts
Wednesday, December 18, 2013
Gold import quota comes down to 15 kg a day
The central bank has been resisting continued pressure from bullion traders to increase the quota. Only commercial banks are allowed to import gold .
While the central bank is concerned that a hike in the quota
Saturday, November 23, 2013
Gold dips to Rs 54,000
KATHMANDU, NOV 22 - 2013
Local bullion prices cooled down in a reflection of international trends with gold dropping Rs 1,600 per tola. The Federation of Nepal Gold and Silver Dealers’ Association (Fenegosida) on Thursday set the price of the yellow metal at Rs 54,000 per tola (11.664 gm). On Wednesday, gold traded at Rs 55,600 per tola.
Similarly, silver became cheaper by Rs 40 per tola. Silver traded at Rs 865 per tola on Thursday, down from Rs 905 on Wednesday.
Meanwhile in the international market, gold traded at US$ 1,283.17 per ounce on Thursday. World prices stood at US$ 1,247.53 per ounce on Sunday. Fenegosida maintained Sunday’s prices till Wednesday since the Nepali market was greatly affected by the Constituent Assembly (CA) polls.
“As we fix the rates based on international trends, prices have dropped in the market here,” said Mani Ratna Shakya, president of Fenegosida. “As prices in the international market remain volatile, we cannot predict local prices until tomorrow morning.”
Meanwhile, the sharp fall in gold prices is expected to bring smiles to wedding shoppers. Gold sales jump during the marriage season which lasts from mid-November to mid-December due to large purchases to make bridal jewelry.
Traders say that the market witnesses a growth of over 100 percent during the month compared to normal times. Demand remains on the high side until mid-February.
“Due to the CA election, people were too preoccupied to visit the bullion market to buy gold . We are expecting a huge rise in sales from now onward,” said Shakya. Demand for the precious yellow metal is certain to remain high throughout the country, he added.
However, political stability will play a crucial role in the performance of the bullion market, he said. “Demand will definitely be higher. However, if there is political stability, it will be much greater than expected,” said Shakya.
While the usual daily requirement of gold in the local market is estimated to be 15-20 kg, it jumps to more than 40 kg during the period mid-November to mid-December.
Considering the surge in demand during this time of the year, Nepal Rastra Bank has permitted banks to import 20 kg of gold daily until mid-December.
The central bank allows banks to import only 15 kg of gold daily during other times.
Source: The Kathmandu Post
Thursday, August 29, 2013
Duty on gold to be hiked to match prices in India
KATHMANDU, AUG 27 - 2013
The government has planned to hike the import duty on gold in a bid to curb possible smuggling to India due to higher prices there. “We are working on a proposal to jack up the duty which we will send to the cabinet this week,” said Rajan Khanal, joint secretary at the Finance Ministry.
Nepali gold traders have been urging the government to raise the import duty from Rs 4,400 to Rs 5,000 per 10 gm after India increased the duty to 10 percent on Aug 13.
“We will propose a tariff which will keep our prices slightly higher than in India,” said Khanal. India has fixed the customs duty at Rs 4,480 per 10 gm.
Nepal increased the customs duty from Rs 3,000 to Rs 3,600 per 10 gm through the budget for the current fiscal year unveiled last month. The difference in import taxes between Nepal and India has made gold cheaper in Nepal by Rs 880 per 10 gm.
The Federation of Nepal Gold and Silver Dealers Association (Fenegosida) said the government should fix the customs duty so that gold is dearer in Nepal by around Rs 1,000 per tola (11.664 gm) to prevent possible smuggling to India and aggravating a shortage in the local market.
Banks supply 15 kg of gold daily to the local market. The shortfall is made up by illegal imports from China. The local market consumes around 30 kg of gold during normal times. The government is planning to increase the supply by 5 kg during festival season when demand surges, said dealers.
“The possibility of the gold supplied by banks being smuggled is low as traders get it in low quantities,” said Mani Ratna Shakya, president of Fenegosida. He added that higher prices in India mean the precious metal flowing south leading to shortages in Nepal.
The recent seizure of 35 kg of contraband gold brought from China and 10 tolas of gold being confiscated from two Indian nationals in Mahottari point to the direction of the illegal trade. Normally, the yellow metal is smuggled to India for two reasons -- the higher prices there and as a way of earning Indian currency.
A dealer said that a smuggler importing gold illegally from China makes a profit of over Rs 360,000 per kg by evading taxes, and if the same gold is smuggled to India, the smuggler can earn another Rs 350,000 per kg.
Meanwhile, gold prices on Monday rose Rs 500 to Rs 58,900 per tola due to the double whammy of a stronger US dollar and a price hike in the international market. Gold traded at Rs 58,400 per 10 gm in the local market on Sunday.
Gold prices started to soar last week hitting customers planning to buy gold for the approaching festivals. Fenegosida said that gold prices went up US$ 16 per ounce in a week on the world market. It added that the exchange rate of the Nepali currency rose Rs 3 to Rs 103 per dollar further pushing up gold prices.
Source: The Kathmandu Post
Wednesday, July 3, 2013
Gold dearer by Rs 650 per tola
KATHMANDU, July 3, 2013
Gold price jumped by Rs 650 per tola (11.664 grams) to Rs 49,150 per tola in the domestic market on Tuesday.
The precious yellow metal was traded at Rs 48,500 per tola on Monday.
Gold price went up in the domestic market following price hike in the international market, according to the Federation of Nepal Gold and Silver Dealers´ Associations.
Gold was traded at $1,297 per troy ounce in the international market on Tuesday, up $15 from Monday´s price.
Reuters reported that gold price rose as the dollar steadied and equity markets eased ahead of US economic data this week which should give more clues on the country´s monetary policy.
Gold price has been steadily increasing in the domestic market after plunging to 23-month low of Rs 48,100 per tola on June 28.
Price of silver has, however, remained stable at Rs 815 per tola since June 30.
Source: Republica
Sunday, June 9, 2013
Govt told to raise import duty on gold
KATHMANDU, June 8, 2013
Gold traders have requested the government to raise import duty on gold.
They made such a request arguing that duty hike on gold in India would spur smuggling of yellow to the southern neighbor at a time when the local market is facing shortage of gold.
India on Wednesday hiked gold import duty from 6 percent to 8 percent to curb its current account deficit.
“At a time when the domestic market is facing gold shortage, the recent duty hike in India might increase gold smuggling to India,” Mani Ratna Shakya, president of Federation of Nepal Gold and Silver Dealers´ Associations, told Republica. “Hence, we have requested the government to hike the duty as soon as possible.”
If customs duty on gold is raised in line with India, the yellow metal will be dearer in the domestic market by around Rs 1,000 per 10 grams. But traders have requested the government to increase the import duty by at least Rs 1,500 per 10 grams to prevent smuggling of gold to India.
“If the government does not raise duty immediately, the duty hike in India, which has made gold expensive there compared to the local market, will encourage smugglers to illegally export the yellow metal to India to get Indian currency which is selling at higher rates in black market,” Shakya added.
Shakya told Republica that the federation has already raised the issue before the Governor of Nepal Rastra Bank - the central bank. “The Governor has assured us that he would look into the issue and do the needful,” he added.
Bullion traders have demanded that the government take the decision on the issue at the earliest.
The government has been levying customs duty of Rs 3,000 per 10 grams on gold. It had raised duty on January 24 by Rs 700 per 10 grams after the southern neighbor increased duty on refined gold to IRs 2,880 per 10 grams.
Source: Republica
Wednesday, April 17, 2013
Gold price drops, sinks to 20-month low
KATHMANDU, APR 17, 2013
Gold plunged to 20-month low in the domestic market today, triggering a shopping frenzy, as buyers rushed to jewellery stores to make good use of unprecedented depreciation of the yellow metal.
Gold price dropped by Rs 3,000 today, on second consecutive day after it had the biggest drop in a day of Rs 3,300 yesterday, to Rs 49,500 a tola (11.664 grams), with the yellow metal pegged at $1,360 per troy ounce in the international market.
“Yesterday customers were less excited about the drop in price but depreciation of gold on the second consecutive day has sharply increased the demand,” said Manik Ratna Shakya, General Secretary of Nepal Gold and Silver Dealers Federation. The gold price started falling yesterday after the international bullion market witnessed panic selling by gold hoarders, pulling the price down to $1,460.
“Buyers are lapping up the downfall trend, considering it the best time to buy jewellery for wedding season,” Shakya said, hinting that the supply constraint of 14 kg per day will come into play any time soon. As the global gold price retreated to a two-year low, price in the domestic market plunged to its August 2011 level. The yellow metal price has come down by almost 20 per cent from the highest ever recorded price of Rs 61,848 per tola back in November 2012.
The proposal that Cyprus sell some of its gold reserves to pay off debts in accordance with suggestions from the European Central Bank and International Monetary Fund triggered the current bout of plunge. Reports suggest that large sell-orders placed by big investment banks spooked the markets and led to current decline.
Cyprus selling its gold reserves reflected larger monetisation of gold reserves across other European central banks that are going through debt troubles. In addition, the US Federal Reserve is expected to conclude its bonds buying drive to keep interest rates at near-zero level soon following some positive signs of recovery in the economy. If the Federal Reserve allows interest rates to rise, that will counter inflation concerns, and gold will lose its sheen as a safe-haven investment.
Last week, Goldman Sachs — one of the largest investment banks in the world — suggested its clients to take short position in gold, implying ‘sell gold at current price then buy it when the price plunges’. The bank had noted last week that the decline in gold could be faster than analysts had initially expected. It has been urging its clients to sell gold since December 2012.
Source: THT
Gold plunged to 20-month low in the domestic market today, triggering a shopping frenzy, as buyers rushed to jewellery stores to make good use of unprecedented depreciation of the yellow metal.
Gold price dropped by Rs 3,000 today, on second consecutive day after it had the biggest drop in a day of Rs 3,300 yesterday, to Rs 49,500 a tola (11.664 grams), with the yellow metal pegged at $1,360 per troy ounce in the international market.
“Yesterday customers were less excited about the drop in price but depreciation of gold on the second consecutive day has sharply increased the demand,” said Manik Ratna Shakya, General Secretary of Nepal Gold and Silver Dealers Federation. The gold price started falling yesterday after the international bullion market witnessed panic selling by gold hoarders, pulling the price down to $1,460.
“Buyers are lapping up the downfall trend, considering it the best time to buy jewellery for wedding season,” Shakya said, hinting that the supply constraint of 14 kg per day will come into play any time soon. As the global gold price retreated to a two-year low, price in the domestic market plunged to its August 2011 level. The yellow metal price has come down by almost 20 per cent from the highest ever recorded price of Rs 61,848 per tola back in November 2012.
The proposal that Cyprus sell some of its gold reserves to pay off debts in accordance with suggestions from the European Central Bank and International Monetary Fund triggered the current bout of plunge. Reports suggest that large sell-orders placed by big investment banks spooked the markets and led to current decline.
Cyprus selling its gold reserves reflected larger monetisation of gold reserves across other European central banks that are going through debt troubles. In addition, the US Federal Reserve is expected to conclude its bonds buying drive to keep interest rates at near-zero level soon following some positive signs of recovery in the economy. If the Federal Reserve allows interest rates to rise, that will counter inflation concerns, and gold will lose its sheen as a safe-haven investment.
Last week, Goldman Sachs — one of the largest investment banks in the world — suggested its clients to take short position in gold, implying ‘sell gold at current price then buy it when the price plunges’. The bank had noted last week that the decline in gold could be faster than analysts had initially expected. It has been urging its clients to sell gold since December 2012.
Source: THT
Tuesday, April 16, 2013
Gold price suffers biggest single day fall
APR 16 - 2013
Triggered by a huge downfall in the international market, the domestic market witnessed the biggest single day drop in price of gold on Monday.
The precious yellow metal was traded at Rs 45,010 per 10 gm (Rs 52,500 per tola), down from Rs 47,840 for 10gms on Sunday.
This is the biggest drop in the price witnessed by the domestic bullion market so far. Earlier in mid-November 2011, price of gold had fallen by Rs 2,155, per 10 gm, the second biggest fall in the price. It could bring a huge relief to those tying knot as people have been compelled to spend massively on gold purchases.
Gold price in the international market dropped dramatically as investors across the globe started opting to put their money on property, equity and fixed deposits. News agencies have reported that the improvement in the US economy, coupled with the Euro and Cyprus issues, has led to investors shifting from gold to equities and other investment avenues.
Reuters reported that gold dropped as much as 6.3 percent on Monday to below $1,400 per ounce for the first time since March 2011 as the market’s downward momentum gained speed after more than four months of investor selling.
According to Manik Ratna Shakya, general secretary of Federation of Nepal Gold and Silver Dealers Association (FNEGOSIDA), the current bullion price has come down to the level that was at the same period last year. The price of the precious metal had hit a record high of Rs 53,275 in September 2012.
“Due to volatility in gold price in the international market, the price has been going down continuously in the recent days,” said Shakya. “It might drop further on Tuesday but is unlikely to go down drastically as today.”
Despite massive downturn in gold price, gold traders claimed that sales dropped dramatically on Monday compared to Sunday. They said people are expecting further drop in price. “People are confused and are in wait-and-watch mode, predicting the price to go down further,” said Narendra Kumar Gupta, chairman of Shree Riddhi Siddhi Jewellers. Manish Pradhan, director of Arsi Jewellers echoed Gupta. “Compared to Sunday, our sales have fallen down significantly.”
Despite the current drop in demand, trade pundits predicted a short supply of gold in the market in the near future. “There isn’t much demand now despite the beginning of wedding season. But once the price starts to pick up after a possible further fall, the market will witness shortage of gold .” Gupta said, pointing to trends of Nepali customers who prefer buying gold when the price starts going up after a slip.
The ceiling on gold import imposed by the Nepal Rastra Bank (NRB) too is likely to contribute to the possible bullion shortage, traders said. The traders have long been demanding to increase the current quota of 15kg but the central bank has been resisting it. “The current daily import quota is insufficient even during normal days,” Shakya said.
He added that the failure of Agriculture Development Bank to supply gold in the local market on Monday would worsen the crisis, once the demand starts swelling. The bullion traders have planned to meet Finance Minister Shankar Koirala to request him to increase the quota.
Source: The Kathmandu Post
Triggered by a huge downfall in the international market, the domestic market witnessed the biggest single day drop in price of gold on Monday.
The precious yellow metal was traded at Rs 45,010 per 10 gm (Rs 52,500 per tola), down from Rs 47,840 for 10gms on Sunday.
This is the biggest drop in the price witnessed by the domestic bullion market so far. Earlier in mid-November 2011, price of gold had fallen by Rs 2,155, per 10 gm, the second biggest fall in the price. It could bring a huge relief to those tying knot as people have been compelled to spend massively on gold purchases.
Gold price in the international market dropped dramatically as investors across the globe started opting to put their money on property, equity and fixed deposits. News agencies have reported that the improvement in the US economy, coupled with the Euro and Cyprus issues, has led to investors shifting from gold to equities and other investment avenues.
Reuters reported that gold dropped as much as 6.3 percent on Monday to below $1,400 per ounce for the first time since March 2011 as the market’s downward momentum gained speed after more than four months of investor selling.
According to Manik Ratna Shakya, general secretary of Federation of Nepal Gold and Silver Dealers Association (FNEGOSIDA), the current bullion price has come down to the level that was at the same period last year. The price of the precious metal had hit a record high of Rs 53,275 in September 2012.
“Due to volatility in gold price in the international market, the price has been going down continuously in the recent days,” said Shakya. “It might drop further on Tuesday but is unlikely to go down drastically as today.”
Despite massive downturn in gold price, gold traders claimed that sales dropped dramatically on Monday compared to Sunday. They said people are expecting further drop in price. “People are confused and are in wait-and-watch mode, predicting the price to go down further,” said Narendra Kumar Gupta, chairman of Shree Riddhi Siddhi Jewellers. Manish Pradhan, director of Arsi Jewellers echoed Gupta. “Compared to Sunday, our sales have fallen down significantly.”
Despite the current drop in demand, trade pundits predicted a short supply of gold in the market in the near future. “There isn’t much demand now despite the beginning of wedding season. But once the price starts to pick up after a possible further fall, the market will witness shortage of gold .” Gupta said, pointing to trends of Nepali customers who prefer buying gold when the price starts going up after a slip.
The ceiling on gold import imposed by the Nepal Rastra Bank (NRB) too is likely to contribute to the possible bullion shortage, traders said. The traders have long been demanding to increase the current quota of 15kg but the central bank has been resisting it. “The current daily import quota is insufficient even during normal days,” Shakya said.
He added that the failure of Agriculture Development Bank to supply gold in the local market on Monday would worsen the crisis, once the demand starts swelling. The bullion traders have planned to meet Finance Minister Shankar Koirala to request him to increase the quota.
Source: The Kathmandu Post
Friday, April 5, 2013
Gold loses glitter, price drops to 10-month low
KATHMANDU, APR 05, 2013
The domestic precious metal market saw the price of gold plunge by Rs 900 in a week due to the retreating price in the international bullion market.
As the price of gold sunk to $1,550 in the global market, the price in the domestic market has been determined at Rs 55,700 for a tola (11.664 grams) — the lowest in last 10 months — as the price had reached to this level on February 21 and July 13, 2012.
Following the United States Federal Reserve’s zero-rate policy, risk assets of the equity markets in the US have become attractive and as a result investors are moving funds to these instruments for short-term gains. The aversion of a full blown Cyprus banking crisis has also reduced the appeal of gold at present. Moreover, Credit Suisse has also cut gold price forecasts for this year and next — reducing its 2013 price estimation on gold to $1,580 from $1,740 an ounce.
Earlier in September, the price of gold had reached Rs 61,760 per tola as its price shot up worldwide to $1770 per troy ounce. United States’ Federal Reserve back then had revealed its plans to purchase $40 billion worth of mortgage-backed securities per month until it saw a substantial improvement in the employment picture.
Nepal imported gold worth Rs 15.5 billion in the first seven months of the current fiscal year. Government allows only banks to import 15 kilos of gold per day. Traders have been asking the government to increase the quota saying the supply is half the demand.
Source: THT
The domestic precious metal market saw the price of gold plunge by Rs 900 in a week due to the retreating price in the international bullion market.
As the price of gold sunk to $1,550 in the global market, the price in the domestic market has been determined at Rs 55,700 for a tola (11.664 grams) — the lowest in last 10 months — as the price had reached to this level on February 21 and July 13, 2012.
Following the United States Federal Reserve’s zero-rate policy, risk assets of the equity markets in the US have become attractive and as a result investors are moving funds to these instruments for short-term gains. The aversion of a full blown Cyprus banking crisis has also reduced the appeal of gold at present. Moreover, Credit Suisse has also cut gold price forecasts for this year and next — reducing its 2013 price estimation on gold to $1,580 from $1,740 an ounce.
Earlier in September, the price of gold had reached Rs 61,760 per tola as its price shot up worldwide to $1770 per troy ounce. United States’ Federal Reserve back then had revealed its plans to purchase $40 billion worth of mortgage-backed securities per month until it saw a substantial improvement in the employment picture.
Nepal imported gold worth Rs 15.5 billion in the first seven months of the current fiscal year. Government allows only banks to import 15 kilos of gold per day. Traders have been asking the government to increase the quota saying the supply is half the demand.
Source: THT
Tuesday, January 1, 2013
Shortage, smuggling and record price for Gold
KATHMANDU, Dec 31, 2012
Customers of gold in 2012 had to suffer from various problems due to
anomalies that crept into the country´s bullion market and impacts of
global economic instability.
First, the price of gold remained too volatile and continued to break past records consistently, making life difficult for general public.
When the year 2012 began, the market had opened with gold priced at Rs 44,840 per ten grams (Rs 52,300 per tola). But as euro zone´s debt crisis and upheavals in global currency market drove investors to safe haven, gold price soon rallied with intermittent downward spirals. By mid-June, the bullion traders were already announcing new records. The trend continued till the price hit an all-time high of Rs 53,025 per ten grams (Rs 61,850 per tola) on November 25.
By the time the year ended, gold was hovering at over Rs 50,000 per 10 grams. This mainly hurt middle and low-income groups, who, irrespective of the price, had to buy gold for marriage and other social events.
Secondly, the market continued to reel under acute scarcity of gold almost throughout the year, as government continued to cap its supply in a bid to discourage imports, something which was contributing to dent country´s trade gap and balance of payment.
Such demand-supply mismatch, meanwhile, brought in the third problem -- rise in smuggling of the yellow metal from two next-door neighbors - India and China. In the second half of the year, illicit import from China rose, as limited circulation of Indian Currency (IC) in the market prompted unscrupulous traders to smuggle it to India to get IC that has been selling for up to Rs 168 per IC 100 (Rs 8 higher than the official rate) in the informal currency market in Nepal.
“The scarcity had surfaced since the very beginning, but it deepened to a bitter level in the second half of 2012, inviting different anomalies such as smuggling and black marketeering of gold in domestic market,” Tej Ratna Shakya, president of Nepal Gold and Silver Dealers Association (Negosida), told Republica.
Latest in the series of gold smuggling, police confiscated 9 kg of gold in Kavre along Araniko Highway on December 4 and 3 kg of gold was found unattended at Tatopani Customs on December 17.
Gold supplies remained limited to 15 kg a day through around a dozen commercial banks, whereas daily demand stood at average 30-35 kg over the year.
“Amid short supply of gold, smuggling of gold recorded first time from China after many years. However, gold smuggling from India is frequent for many years due to open border with our country,” said Shakya.
Deepening shortage of IC in domestic market led to smuggling of the precious metal to the southern neighbor to earn IC which has been pricier in black markets of bordering towns.
“Though gold price in Nepali markets is higher by Rs 800 per tola compared to India, traders are selling gold for IC to earn more from it through black marketeering. We saw such a unique trend in 2012,” said Shakya. According to him, the ever lingering deficit also encouraged black marketeering of gold, making the precious metal more expensive by around Rs 1,000 per tola in comparison to the price recorded in international bullion market.
He also complained that the mismanagement of gold available in the market also resulted in the shortage. Though the gold distribution directives envisage that importer banks have to distribute the gold from eight different places outside the capital, they are issuing gold to dealer in limited cities.
Though the government attempted to control gold import, putting a cap of 15 kg per day, average import during the first four months of the year 2012/13 was worth Rs 74.56 million a day, up from Rs 70.6 million a day recorded during the same period of 2011/12.
Source: Republica
First, the price of gold remained too volatile and continued to break past records consistently, making life difficult for general public.
When the year 2012 began, the market had opened with gold priced at Rs 44,840 per ten grams (Rs 52,300 per tola). But as euro zone´s debt crisis and upheavals in global currency market drove investors to safe haven, gold price soon rallied with intermittent downward spirals. By mid-June, the bullion traders were already announcing new records. The trend continued till the price hit an all-time high of Rs 53,025 per ten grams (Rs 61,850 per tola) on November 25.
By the time the year ended, gold was hovering at over Rs 50,000 per 10 grams. This mainly hurt middle and low-income groups, who, irrespective of the price, had to buy gold for marriage and other social events.
Secondly, the market continued to reel under acute scarcity of gold almost throughout the year, as government continued to cap its supply in a bid to discourage imports, something which was contributing to dent country´s trade gap and balance of payment.
Such demand-supply mismatch, meanwhile, brought in the third problem -- rise in smuggling of the yellow metal from two next-door neighbors - India and China. In the second half of the year, illicit import from China rose, as limited circulation of Indian Currency (IC) in the market prompted unscrupulous traders to smuggle it to India to get IC that has been selling for up to Rs 168 per IC 100 (Rs 8 higher than the official rate) in the informal currency market in Nepal.
“The scarcity had surfaced since the very beginning, but it deepened to a bitter level in the second half of 2012, inviting different anomalies such as smuggling and black marketeering of gold in domestic market,” Tej Ratna Shakya, president of Nepal Gold and Silver Dealers Association (Negosida), told Republica.
Latest in the series of gold smuggling, police confiscated 9 kg of gold in Kavre along Araniko Highway on December 4 and 3 kg of gold was found unattended at Tatopani Customs on December 17.
Gold supplies remained limited to 15 kg a day through around a dozen commercial banks, whereas daily demand stood at average 30-35 kg over the year.
“Amid short supply of gold, smuggling of gold recorded first time from China after many years. However, gold smuggling from India is frequent for many years due to open border with our country,” said Shakya.
Deepening shortage of IC in domestic market led to smuggling of the precious metal to the southern neighbor to earn IC which has been pricier in black markets of bordering towns.
“Though gold price in Nepali markets is higher by Rs 800 per tola compared to India, traders are selling gold for IC to earn more from it through black marketeering. We saw such a unique trend in 2012,” said Shakya. According to him, the ever lingering deficit also encouraged black marketeering of gold, making the precious metal more expensive by around Rs 1,000 per tola in comparison to the price recorded in international bullion market.
He also complained that the mismanagement of gold available in the market also resulted in the shortage. Though the gold distribution directives envisage that importer banks have to distribute the gold from eight different places outside the capital, they are issuing gold to dealer in limited cities.
Though the government attempted to control gold import, putting a cap of 15 kg per day, average import during the first four months of the year 2012/13 was worth Rs 74.56 million a day, up from Rs 70.6 million a day recorded during the same period of 2011/12.
Source: Republica
Wednesday, November 21, 2012
Gold shortage hits local market
KATHMANDU, NOV 20 - 2012
Domestic market is facing acute shortage of gold even as the daily demand of yellow metal continues to surge due to wedding season. Traders say there is a demand for more than 30 kg of gold a day but the supply has remained below 15kg. And with the banks failing to supply gold this week due to Tihar holidays, the situation turned from bad to worse.
According to bullion traders, the yellow metal is being sold with a premium of Rs 1,000 per tola (11.664 gm) over the daily price fixed by the Nepal Gold and Silver Dealers Association (Negosida). The association on Monday set the precious metal price at Rs 51,870 per 10 gm, but customers rushing to gold shops could not find gold at that price.
Negosida President Tej Ratna Shakya blamed inadequate supply for the higher price. “Because of poor supply, they have reduced taking orders for new jewelry for weddings,” Shakya said.
The traders have been demanding the government increase the gold quota, saying that the provision of 15 kg a day was insufficient. The supply situation has worsened after some commercial banks authorised to release gold in local market were unable to import from international market last week because of Tihar holidays.
It was the turn of Mega Bank and Civil Bank to import and release gold in Bagmati Zone and outside, respectively. The central bank provision requires banks importing gold to distribute 60 percent of the daily quota of 15 kg in Bagmati Zone and the remaining in other parts of the country.
Mega Bank said that it would import gold and start selling from Tuesday. “We could not import gold in time because of Tihar vacation,” said Anil Shah, the bank’s CEO. “There is a demand for 350 kg in the market . But we will be able to import and sell only 50 kg on Tuesday.”
Likewise, Civil Bank said that it would be importing gold by Thursday. Bankers argued failure to import gold in time was not the main reason behind the shortage, but it was due to bigger demand. Daily demand for gold during the wedding season ranges from 30 to 40 kg a day. Since commercial banks are permitted to sell only 15 kg, remaining demand is being partially fulfilled by gold imported illegally, they say. “Gold is also being used as a mode of payment to Indian traders due to shortage of Indian currency,” a trader said, lamenting that it was hard to find Indian currency notes even at the rate of Rs 168 per IRs 100. The official exchange rate is Rs 160 per IRs 100.
Source: The Kathmandu Post
Domestic market is facing acute shortage of gold even as the daily demand of yellow metal continues to surge due to wedding season. Traders say there is a demand for more than 30 kg of gold a day but the supply has remained below 15kg. And with the banks failing to supply gold this week due to Tihar holidays, the situation turned from bad to worse.
According to bullion traders, the yellow metal is being sold with a premium of Rs 1,000 per tola (11.664 gm) over the daily price fixed by the Nepal Gold and Silver Dealers Association (Negosida). The association on Monday set the precious metal price at Rs 51,870 per 10 gm, but customers rushing to gold shops could not find gold at that price.
Negosida President Tej Ratna Shakya blamed inadequate supply for the higher price. “Because of poor supply, they have reduced taking orders for new jewelry for weddings,” Shakya said.
The traders have been demanding the government increase the gold quota, saying that the provision of 15 kg a day was insufficient. The supply situation has worsened after some commercial banks authorised to release gold in local market were unable to import from international market last week because of Tihar holidays.
It was the turn of Mega Bank and Civil Bank to import and release gold in Bagmati Zone and outside, respectively. The central bank provision requires banks importing gold to distribute 60 percent of the daily quota of 15 kg in Bagmati Zone and the remaining in other parts of the country.
Mega Bank said that it would import gold and start selling from Tuesday. “We could not import gold in time because of Tihar vacation,” said Anil Shah, the bank’s CEO. “There is a demand for 350 kg in the market . But we will be able to import and sell only 50 kg on Tuesday.”
Likewise, Civil Bank said that it would be importing gold by Thursday. Bankers argued failure to import gold in time was not the main reason behind the shortage, but it was due to bigger demand. Daily demand for gold during the wedding season ranges from 30 to 40 kg a day. Since commercial banks are permitted to sell only 15 kg, remaining demand is being partially fulfilled by gold imported illegally, they say. “Gold is also being used as a mode of payment to Indian traders due to shortage of Indian currency,” a trader said, lamenting that it was hard to find Indian currency notes even at the rate of Rs 168 per IRs 100. The official exchange rate is Rs 160 per IRs 100.
Source: The Kathmandu Post
Sunday, November 18, 2012
Shortage spurs gold black marketeering rife
KATHMANDU, Nov 11-2012
Black marketeering of gold has increased as yellow metal becomes scarce in the market. Officials of the Nepal Gold and Silver Dealers Association (Negosida) disclosed to Republica that some of the dealers were currently charging customers as much as Rs 1,000 more on a tola (11.664 grams) of yellow metal over its official retail rate.
Though dealers close their outlets on public holidays, they ran their businesses on Saturday as well keeping in mind Dhan Teras, which falls on Sunday, and Laxmi Puja due on Tuesday. And some of the retailers charged their customers as high as Rs 61,099 per tola of gold, which is Rs 1,000 more than Negosida set rate.
“Yes we received complaints of some of the dealers forcing customers to pay Rs 1,000 more per tola,” confirmed Tej Ratna Shakya, president of Negosida. “As their act was unfair, we instantly instructed them to refrain from such acts,” he told Republica.
Dealers said the black marketeering has surfaced mainly because gold has become scarce in the market. According to them, gold demand has presently soared to around 45 kgs a day due to festive consumption and upcoming marriage season whereas supply from the banking system - the only official supply channel - continues to remain at 15 kgs a day.
“The short supply has been there since the onset of Dashain. But what has troubled us of late is that the supply chain has gone wayward because banks these days are supplying gold to dealers they are familiar with, overstepping the basic sales guidelines issued by the central bank,” said Shakya.
Under the existing guidelines, Nepal Rastra Bank (NRB) has set commercial banks to supply 60 percent of fixed daily quota to dealers in Bagmati zone and remaining 40 percent to the dealers in 13 other zones.
In Kathmandu (that is in Bagmati), banks have been asked to make supply based on the recommendation of Negosida, Gems and Jewelers Association and Handicrafts Association, among others. Supplies to be made in other zones should be based on recommendation of local Negosida and other agencies.
“But, unfortunately, banks in Kathmandu of late are supplying gold to dealers of other zones based on recommendations issued by agencies located outside the Valley,” said a dealer. And some of the Kathmandu-based dealers too are exercising their connections with banks outside the Valley and are acquiring gold supposed to be supplied to local dealers.
Such personal connections-based sales by the commercial banks have eroded the predictability of the gold supply in the market and created more problems for Negosida officials in managing the market, said Shakya.
That is not all. Scarcity is there because Negosida officials also suspect that a chunk of gold issued for local sales could be finding its way to the Indian market, particularly as payment for settling unauthorized cross border trade.
Government officials ruled out such possibility saying that gold in India was cheaper than in Nepal by Rs 600 per ten grams, and that payment through gold would mean traders would be paying more for the goods than they are required to pay.
But dealers like Shakya, however, argue differently. “IC 100 in the informal currency market, from where illicit traders mainly source the IC, is presently traded at Rs 168 -- Rs 8 higher than official rate. Hence, unlike the government´s assessment, our calculations is payment through gold becomes more profitable for financing unauthorized trade than currency,” said Shakya.
Negosida officials, including Shakya, said that their association has already reported their speculations and problems to the NRB rules, requesting it to correct the operations in the market.
In its suggestions, Negosida has asked the NRB to ensure that commercial banks are strictly adhering to its rules. It has also requested the central bank to increase the daily supply quota of gold in the market, and also increase IC supply in the system in order to do away with currency anomalies.
Source: Republica
Black marketeering of gold has increased as yellow metal becomes scarce in the market. Officials of the Nepal Gold and Silver Dealers Association (Negosida) disclosed to Republica that some of the dealers were currently charging customers as much as Rs 1,000 more on a tola (11.664 grams) of yellow metal over its official retail rate.
Though dealers close their outlets on public holidays, they ran their businesses on Saturday as well keeping in mind Dhan Teras, which falls on Sunday, and Laxmi Puja due on Tuesday. And some of the retailers charged their customers as high as Rs 61,099 per tola of gold, which is Rs 1,000 more than Negosida set rate.
“Yes we received complaints of some of the dealers forcing customers to pay Rs 1,000 more per tola,” confirmed Tej Ratna Shakya, president of Negosida. “As their act was unfair, we instantly instructed them to refrain from such acts,” he told Republica.
Dealers said the black marketeering has surfaced mainly because gold has become scarce in the market. According to them, gold demand has presently soared to around 45 kgs a day due to festive consumption and upcoming marriage season whereas supply from the banking system - the only official supply channel - continues to remain at 15 kgs a day.
“The short supply has been there since the onset of Dashain. But what has troubled us of late is that the supply chain has gone wayward because banks these days are supplying gold to dealers they are familiar with, overstepping the basic sales guidelines issued by the central bank,” said Shakya.
Under the existing guidelines, Nepal Rastra Bank (NRB) has set commercial banks to supply 60 percent of fixed daily quota to dealers in Bagmati zone and remaining 40 percent to the dealers in 13 other zones.
In Kathmandu (that is in Bagmati), banks have been asked to make supply based on the recommendation of Negosida, Gems and Jewelers Association and Handicrafts Association, among others. Supplies to be made in other zones should be based on recommendation of local Negosida and other agencies.
“But, unfortunately, banks in Kathmandu of late are supplying gold to dealers of other zones based on recommendations issued by agencies located outside the Valley,” said a dealer. And some of the Kathmandu-based dealers too are exercising their connections with banks outside the Valley and are acquiring gold supposed to be supplied to local dealers.
Such personal connections-based sales by the commercial banks have eroded the predictability of the gold supply in the market and created more problems for Negosida officials in managing the market, said Shakya.
That is not all. Scarcity is there because Negosida officials also suspect that a chunk of gold issued for local sales could be finding its way to the Indian market, particularly as payment for settling unauthorized cross border trade.
Government officials ruled out such possibility saying that gold in India was cheaper than in Nepal by Rs 600 per ten grams, and that payment through gold would mean traders would be paying more for the goods than they are required to pay.
But dealers like Shakya, however, argue differently. “IC 100 in the informal currency market, from where illicit traders mainly source the IC, is presently traded at Rs 168 -- Rs 8 higher than official rate. Hence, unlike the government´s assessment, our calculations is payment through gold becomes more profitable for financing unauthorized trade than currency,” said Shakya.
Negosida officials, including Shakya, said that their association has already reported their speculations and problems to the NRB rules, requesting it to correct the operations in the market.
In its suggestions, Negosida has asked the NRB to ensure that commercial banks are strictly adhering to its rules. It has also requested the central bank to increase the daily supply quota of gold in the market, and also increase IC supply in the system in order to do away with currency anomalies.
Source: Republica
Thursday, November 8, 2012
Gold price up by Rs 1,115 in 3 days
KATHMANDU, NOV 08 - 2012
Gold price has increased by Rs 1,115 in three days, taking the yellow metal cost at Rs 51,185 per 10 gm (Rs 59,702 per tola) on Wednesday. Price started to go up from Tuesday due to price hike in international market, shortage in domestic market and rupee devaluation.
Despite the soaring price, demand has remained high for the nearing Tihar. The precious metal is hard to find at the price set by the Nepal Gold and Silver Dealers Association (Negosida) because of the shortage. “We are facing acute shortage of yellow metal in this best season of trading,” said Negosida President Tej Ratna Shakya. He said the government imposed limited supply system had encouraged some dealers to charge as much as Rs 1,000 extra per tola (11.664 gm) of gold.
On Sunday, gold was priced at Rs 50,070 per 10 gm by Negosida. Silver too has become dearer, going up by Rs 29 in three days to Rs 981 per 10 gm. Although price of gold and silver remained unchanged on Monday, the value of the yellow metal soared by Rs 515 per 10 gm on Tuesday before going up by Rs 600 on Wednesday.
Gold was traded at $ 1,723.40 per ounce, up by $38 per ounce on Tuesday’s price, in international market on Wednesday.
Considering the growing seasonal demand, Negosida has been putting pressure on the government to increase import quota. Last week, it demanded the central bank increase the current import quota of 15 kg a day to 35 kg. Shakya said that they had also urged the Nepal Bankers Association to release gold as per the central bank directives for gold dealers outside the Bagmati Zone. “Some commercial banks entrusted for gold trading are selling the precious metal going against provision set by the central bank,” said Shakya.
As per the central bank’s directive, commercial banks have to sell 6 kg of gold each day from Birantnagar, Birtamod, Janakpur, Birgunj, Bhairahawa, Pokhara, Nepalgunj and Dhangadi to local dealers on the recommendation of district level gold dealers association.
However, the banks’ failure to reach out to those cities, those dealers are forced to travel to the Capital to buy gold.
Source: The Kathmandu Post
Gold price has increased by Rs 1,115 in three days, taking the yellow metal cost at Rs 51,185 per 10 gm (Rs 59,702 per tola) on Wednesday. Price started to go up from Tuesday due to price hike in international market, shortage in domestic market and rupee devaluation.
Despite the soaring price, demand has remained high for the nearing Tihar. The precious metal is hard to find at the price set by the Nepal Gold and Silver Dealers Association (Negosida) because of the shortage. “We are facing acute shortage of yellow metal in this best season of trading,” said Negosida President Tej Ratna Shakya. He said the government imposed limited supply system had encouraged some dealers to charge as much as Rs 1,000 extra per tola (11.664 gm) of gold.
On Sunday, gold was priced at Rs 50,070 per 10 gm by Negosida. Silver too has become dearer, going up by Rs 29 in three days to Rs 981 per 10 gm. Although price of gold and silver remained unchanged on Monday, the value of the yellow metal soared by Rs 515 per 10 gm on Tuesday before going up by Rs 600 on Wednesday.
Gold was traded at $ 1,723.40 per ounce, up by $38 per ounce on Tuesday’s price, in international market on Wednesday.
Considering the growing seasonal demand, Negosida has been putting pressure on the government to increase import quota. Last week, it demanded the central bank increase the current import quota of 15 kg a day to 35 kg. Shakya said that they had also urged the Nepal Bankers Association to release gold as per the central bank directives for gold dealers outside the Bagmati Zone. “Some commercial banks entrusted for gold trading are selling the precious metal going against provision set by the central bank,” said Shakya.
As per the central bank’s directive, commercial banks have to sell 6 kg of gold each day from Birantnagar, Birtamod, Janakpur, Birgunj, Bhairahawa, Pokhara, Nepalgunj and Dhangadi to local dealers on the recommendation of district level gold dealers association.
However, the banks’ failure to reach out to those cities, those dealers are forced to travel to the Capital to buy gold.
Source: The Kathmandu Post
Sunday, September 16, 2012
Gold at record high
KATHMANDU, SEP 16, 2012
Gold reached yet another record at Rs 61,760 per tola (11.664 grams) as US Federal Reserve (Fed) announced its monetary stimulus package.
The price of gold shot up worldwide to $ 1770 per troy ounce after the Fed revealed plans to purchase $ 40 billion worth of mortgage-backed securities per month until it sees substantial improvement in the employment picture.
The price of gold had been rallying for the last two weeks in expectation of another round of quantitative easing. The bond buying by the Fed will increase money supply to keep interest rates at near zero level possibly leading to inflation.
Silver also reached Rs 1,040 per tola in the domestic market.
Source: THT
Gold reached yet another record at Rs 61,760 per tola (11.664 grams) as US Federal Reserve (Fed) announced its monetary stimulus package.
The price of gold shot up worldwide to $ 1770 per troy ounce after the Fed revealed plans to purchase $ 40 billion worth of mortgage-backed securities per month until it sees substantial improvement in the employment picture.
The price of gold had been rallying for the last two weeks in expectation of another round of quantitative easing. The bond buying by the Fed will increase money supply to keep interest rates at near zero level possibly leading to inflation.
Silver also reached Rs 1,040 per tola in the domestic market.
Source: THT
Tuesday, September 4, 2012
Gold roars to a new high; nears Rs 60,000 per tola
KATHMANDU, Sep 3, 2012
After a brief reprieve last week, gold continued its record-setting spree climbing to a new high of Rs 59,900 per tola (11.664 grams) in the domestic market on Sunday - the first trading day of the week.
Nepal Gold and Silver Dealers´ Association (Negosida), which fixes gold and silver prices in the domestic market, increased gold price by Rs 900 per tola on Sunday compared to Friday when the yellow metal was traded at Rs 59,000 per tola.
“International bullion prices determines gold and silver prices in the domestic market. We had to raise price of gold after the yellow market rallied in the international market on Sunday,” said Diyesh Ratna Shakya, secretary of Negosida. “Glittering gold is turning shoppers away ahead of the festive season.”
Gold, which was priced at US $1,655 per troy ounce during early trading on Friday, gained $36 per troy in the international bullion market on Saturday.
According to Shrestha, gold price is increasing in international market as investors are looking to safe haven due to slowing global stock market.
Traders said demand for gold in the capital has dropped to around 10 kg a day, almost half of average daily demand recorded a month ago.
“It would be difficult for bullion traders to sustain business if gold sales did not pick up during upcoming festive season of Teej, Dashain, Tihar and Chhath,” Pramod Ratna Shakya, proprietor of New Road-based Tejmin Jewelers, said.
Price of silver has also increased by Rs 40 per tola. Silver was traded at Rs 11,145 per tola on Sunday.
Source: Republica
After a brief reprieve last week, gold continued its record-setting spree climbing to a new high of Rs 59,900 per tola (11.664 grams) in the domestic market on Sunday - the first trading day of the week.
Nepal Gold and Silver Dealers´ Association (Negosida), which fixes gold and silver prices in the domestic market, increased gold price by Rs 900 per tola on Sunday compared to Friday when the yellow metal was traded at Rs 59,000 per tola.
“International bullion prices determines gold and silver prices in the domestic market. We had to raise price of gold after the yellow market rallied in the international market on Sunday,” said Diyesh Ratna Shakya, secretary of Negosida. “Glittering gold is turning shoppers away ahead of the festive season.”
Gold, which was priced at US $1,655 per troy ounce during early trading on Friday, gained $36 per troy in the international bullion market on Saturday.
According to Shrestha, gold price is increasing in international market as investors are looking to safe haven due to slowing global stock market.
Traders said demand for gold in the capital has dropped to around 10 kg a day, almost half of average daily demand recorded a month ago.
“It would be difficult for bullion traders to sustain business if gold sales did not pick up during upcoming festive season of Teej, Dashain, Tihar and Chhath,” Pramod Ratna Shakya, proprietor of New Road-based Tejmin Jewelers, said.
Price of silver has also increased by Rs 40 per tola. Silver was traded at Rs 11,145 per tola on Sunday.
Source: Republica
Tuesday, August 28, 2012
Gold, silver set new records
KATHMANDU, Aug 27, 2012
Gold continued its bull run in the domestic market, climbing to a new high of Rs 59,194 per tola (11.664 grams) on Sunday. Silver also set a new record of Rs 1,115 on the day.
Nepal Gold and Silver Dealers´ Association (Negosida) had fixed gold price at Rs 58,900 on Friday. As the association do not fix price on Saturdays, the yellow metal was traded at Rs 58,900 on Saturday as well.
According to traders, gold became expensive in the domestic market following rise in prices of the precious yellow metal in the domestic market. Gold was traded at US $1674 per troy ounce on Sunday, posting a rise of $7 per troy once compared to Saturday.
Negosida has attributed the rise in price to upward journey of gold in the international bullion market. Gold is becoming expensive as investors are turning to safe have following slackness seen in major stock market across the world, officials of Negosida said.
“Price of gold is rising continuously in the international market, making customers nervous ahead of major festivals like Teej, Dashain and Tihar when demand for the yellow metal hits peak,” Bijay Ratna Shakya, secretary of Negosida, told Republica.
Traders said gold´s march into the green territory has led to drop in demand for the yellow metal in the domestic market. They said demand has dropped to an average of 20 kg per day, almost half of the daily demand compared to last year. Gold price has increased by over Rs 10,000 per tola over the past year.
Similarly, price of silver has also hit a new high of Rs 1,115 per tola. Silver was traded at Rs 1,100 per tola on Friday.
Source: Republica
Gold continued its bull run in the domestic market, climbing to a new high of Rs 59,194 per tola (11.664 grams) on Sunday. Silver also set a new record of Rs 1,115 on the day.
Nepal Gold and Silver Dealers´ Association (Negosida) had fixed gold price at Rs 58,900 on Friday. As the association do not fix price on Saturdays, the yellow metal was traded at Rs 58,900 on Saturday as well.
According to traders, gold became expensive in the domestic market following rise in prices of the precious yellow metal in the domestic market. Gold was traded at US $1674 per troy ounce on Sunday, posting a rise of $7 per troy once compared to Saturday.
Negosida has attributed the rise in price to upward journey of gold in the international bullion market. Gold is becoming expensive as investors are turning to safe have following slackness seen in major stock market across the world, officials of Negosida said.
“Price of gold is rising continuously in the international market, making customers nervous ahead of major festivals like Teej, Dashain and Tihar when demand for the yellow metal hits peak,” Bijay Ratna Shakya, secretary of Negosida, told Republica.
Traders said gold´s march into the green territory has led to drop in demand for the yellow metal in the domestic market. They said demand has dropped to an average of 20 kg per day, almost half of the daily demand compared to last year. Gold price has increased by over Rs 10,000 per tola over the past year.
Similarly, price of silver has also hit a new high of Rs 1,115 per tola. Silver was traded at Rs 1,100 per tola on Friday.
Source: Republica
Friday, August 17, 2012
Gold imports up 114%
KATHMANDU, Aug 14, 2012
Even though price of gold is hitting new highs, country´s gold imports increased by a whopping 114 percent to 5,900 kg during fiscal year 2011/12, compared to imports figures of the previous fiscal year.
Value of imports increased by 150 percent to Rs 25.77 billion during the review period, thanks to rise in imports and strengthening weakening of US dollar against Nepali currency. Nepal had imported 2,800 kg gold worth Rs 10.72 billion in 2010/11.
The government has permitted import of 15 kg of gold a day through commercial bank from the last fiscal year, up from 10 kg a day in the previous fiscal year. It, however, had allowed banks to import 20 kg a day during February to July due to pressure from gold traders who argued that insufficient supplies had created black marketeering of the yellow metal in the market.
“Rise in imports and weakening of Nepali rupee against the greenback are the key reasons behind the whooping rise in gold import bill,” said Tej Ratna Shakya, president of Nepal Gold Silver Dealers Association.
In a bid to reduce growing trade deficit, the government had imposed ban on gold import between mid-August and mid-December in fiscal year 2009/10. Later, it imposed quota on gold imports, allowing designated banks to import and sell 10 kg gold a day.
According to traders, average daily demand for gold in the country hovers around 30 kg a day. If traders´ statement is anything to go by, the country is facing shortage of 15 kg of gold a day.
“This shortage had triggered smuggling of the yellow metal from India, China and Bhutan,” Shakya said, adding: “The government import quota cannot meet the demand in the market.”
Given the insufficient import quota, traders fear they will have to face shortage of yellow metal during the Dashain-Tihar festive season when demand goes up sharply. “If the government did not increase import quota, black-marketing and smuggling of the yellow metal will flourish during the festive season,” said Shakya.
Meanwhile, gold price went up by Rs 200 per tola (11.664 grams) and was traded at Rs 57,400 per tola in the domestic market on Monday. The association raised gold price even though the price of the yellow metal dropped to US $1620 during Monday´s trading. Gold trading in the international market had opened at $1623 on the day.
Source: Republica
Even though price of gold is hitting new highs, country´s gold imports increased by a whopping 114 percent to 5,900 kg during fiscal year 2011/12, compared to imports figures of the previous fiscal year.
Value of imports increased by 150 percent to Rs 25.77 billion during the review period, thanks to rise in imports and strengthening weakening of US dollar against Nepali currency. Nepal had imported 2,800 kg gold worth Rs 10.72 billion in 2010/11.
The government has permitted import of 15 kg of gold a day through commercial bank from the last fiscal year, up from 10 kg a day in the previous fiscal year. It, however, had allowed banks to import 20 kg a day during February to July due to pressure from gold traders who argued that insufficient supplies had created black marketeering of the yellow metal in the market.
“Rise in imports and weakening of Nepali rupee against the greenback are the key reasons behind the whooping rise in gold import bill,” said Tej Ratna Shakya, president of Nepal Gold Silver Dealers Association.
In a bid to reduce growing trade deficit, the government had imposed ban on gold import between mid-August and mid-December in fiscal year 2009/10. Later, it imposed quota on gold imports, allowing designated banks to import and sell 10 kg gold a day.
According to traders, average daily demand for gold in the country hovers around 30 kg a day. If traders´ statement is anything to go by, the country is facing shortage of 15 kg of gold a day.
“This shortage had triggered smuggling of the yellow metal from India, China and Bhutan,” Shakya said, adding: “The government import quota cannot meet the demand in the market.”
Given the insufficient import quota, traders fear they will have to face shortage of yellow metal during the Dashain-Tihar festive season when demand goes up sharply. “If the government did not increase import quota, black-marketing and smuggling of the yellow metal will flourish during the festive season,” said Shakya.
Meanwhile, gold price went up by Rs 200 per tola (11.664 grams) and was traded at Rs 57,400 per tola in the domestic market on Monday. The association raised gold price even though the price of the yellow metal dropped to US $1620 during Monday´s trading. Gold trading in the international market had opened at $1623 on the day.
Source: Republica
Tuesday, August 14, 2012
Myagdi based BFIs invest good amount in gold and silver loan
MYAGDI, AUG 12, 2012
The Banks and Financial Institutions (BFIs) in Myagdi district have scaled up their investments in gold and silver loan, comparatively a safe investment sector for BFIs. Generally, gold is considered as a hedge against inflation.
The private and state-owned BFIs have invested a total of Rs 330 million as gold and silver loan, according to the banks' sources. Of them, the state-owned Nepal Bank Ltd has invested Rs 141 million, the highest amount of investment in gold and silver in the district.
Similarly, the Rastriya Banijya Bank (RBB) has invested Rs 140 million while Nilgiri Development Bank and Citizens Bank International have made Rs 50 million and Rs 5 million, respectively.
Chief Executive Officer of Nilgiri Development Bank Anuman Shrestha said that attraction to the gold and silver loan is on the rise for its security.
Banks said that they have problems to invest in the gold and silver loan against the Nepal Rastra Bank's (NRB) ceiling. The NRB has put a ceiling to the BFIs directing them not to invest more than 40 per cent under a single title.
Source: THT
The Banks and Financial Institutions (BFIs) in Myagdi district have scaled up their investments in gold and silver loan, comparatively a safe investment sector for BFIs. Generally, gold is considered as a hedge against inflation.
The private and state-owned BFIs have invested a total of Rs 330 million as gold and silver loan, according to the banks' sources. Of them, the state-owned Nepal Bank Ltd has invested Rs 141 million, the highest amount of investment in gold and silver in the district.
Similarly, the Rastriya Banijya Bank (RBB) has invested Rs 140 million while Nilgiri Development Bank and Citizens Bank International have made Rs 50 million and Rs 5 million, respectively.
Chief Executive Officer of Nilgiri Development Bank Anuman Shrestha said that attraction to the gold and silver loan is on the rise for its security.
Banks said that they have problems to invest in the gold and silver loan against the Nepal Rastra Bank's (NRB) ceiling. The NRB has put a ceiling to the BFIs directing them not to invest more than 40 per cent under a single title.
Source: THT
Friday, July 13, 2012
Inflation threatens to reach double digits
KATHMANDU, JUL 13 - 2012
Rise in prices of both food and non-food items has pushed inflation close to digits, thanks to supply constraints and appreciation of the US dollar against the Nepali rupee.
Inflation rose to 9.9 percent in the 11th month of the fiscal year — this year’s highest, according to a source at the Nepal Rastra Bank (NRB).
Although the price level moderated in the middle of the year, coming down to as low as 6.8 percent in mid-January, the figure remained static at 7 percent in mid-February and mid-March and started to ascend in latter months. Earlier, the figure had hit 8.9 percent in mid-October.
“The latest price rise is mainly the result of supply constraints due to several nationwide bandas and strikes ahead of the dissolution of the Constituent Assembly,” said the NRB official. “In the meantime, the appreciation of dollar against rupee also contributed to the rise in prices of third-country imports.”
According to the official, food prices rose slightly, while prices of vegetables and fruits skyrocketed. Supply constraint is expected to prevail for a few more months of monsoon. “Nepal’s price rise is also correlated with inflation in India where consumer price index is at double digits,” said the official.
Traders also say prices of essential goods such as rice, pulse and edible oil have gone up by 10-12 percent as of July, compared to the same period last year. “For essential commodity prices, it is a huge increment,” said Pabitra Bajracharya, president of Nepal Retailers’ Association. “Purchasing capacity of general people hasn’t increased in the way inflation has gone up. This is a very bad sign for the whole sector.”
According to Bajracharya, oil price has gone up by Rs 20 per litre on an average, while a 30-kg rice packet has become costlier by Rs 100 to Rs 250. Pulses have also become dearer by Rs 10-25 per kg. “As most of the edible oil comes from third countries, mainly from South American, the strengthening of dollar is to blame for the price rise,” said Ishwor Shrestha, one of the major importers of edible oil and sugar.
As far as vegetables are concerned, their prices rose by as high as 60 percent, compared to prices in mid-September 2011. The price of long brinjal rose by 60 percent to Rs 33 per kg, while white potato price reached Rs 25.5 per kg, up 42 percent.
Over the last year, there has been a significant rise in transportation costs too, which has made goods expensive. Bajracharya said cargo vans have doubled their charge within the Valley to Rs 800 per tip.
Inflation Figures
Mid-Aug 2011 7.7
Mid-Sept 2011 8.5
Mid-Oct 2011 8.9
Mid-Nov 2011 8.5
Mid-Dec 2011 7.5
Mid-Jan 2012 6.8
Mid-Feb 2012 7.0
Mid-March 2012 7.0
Mid-April 2012 7.5
Mid-May 2012 8.7
Mid-June 2012 9.9
Source: Nepal Rastra Bank/ The Kathmandu Post
Rise in prices of both food and non-food items has pushed inflation close to digits, thanks to supply constraints and appreciation of the US dollar against the Nepali rupee.
Inflation rose to 9.9 percent in the 11th month of the fiscal year — this year’s highest, according to a source at the Nepal Rastra Bank (NRB).
Although the price level moderated in the middle of the year, coming down to as low as 6.8 percent in mid-January, the figure remained static at 7 percent in mid-February and mid-March and started to ascend in latter months. Earlier, the figure had hit 8.9 percent in mid-October.
“The latest price rise is mainly the result of supply constraints due to several nationwide bandas and strikes ahead of the dissolution of the Constituent Assembly,” said the NRB official. “In the meantime, the appreciation of dollar against rupee also contributed to the rise in prices of third-country imports.”
According to the official, food prices rose slightly, while prices of vegetables and fruits skyrocketed. Supply constraint is expected to prevail for a few more months of monsoon. “Nepal’s price rise is also correlated with inflation in India where consumer price index is at double digits,” said the official.
Traders also say prices of essential goods such as rice, pulse and edible oil have gone up by 10-12 percent as of July, compared to the same period last year. “For essential commodity prices, it is a huge increment,” said Pabitra Bajracharya, president of Nepal Retailers’ Association. “Purchasing capacity of general people hasn’t increased in the way inflation has gone up. This is a very bad sign for the whole sector.”
According to Bajracharya, oil price has gone up by Rs 20 per litre on an average, while a 30-kg rice packet has become costlier by Rs 100 to Rs 250. Pulses have also become dearer by Rs 10-25 per kg. “As most of the edible oil comes from third countries, mainly from South American, the strengthening of dollar is to blame for the price rise,” said Ishwor Shrestha, one of the major importers of edible oil and sugar.
As far as vegetables are concerned, their prices rose by as high as 60 percent, compared to prices in mid-September 2011. The price of long brinjal rose by 60 percent to Rs 33 per kg, while white potato price reached Rs 25.5 per kg, up 42 percent.
Over the last year, there has been a significant rise in transportation costs too, which has made goods expensive. Bajracharya said cargo vans have doubled their charge within the Valley to Rs 800 per tip.
Inflation Figures
Mid-Aug 2011 7.7
Mid-Sept 2011 8.5
Mid-Oct 2011 8.9
Mid-Nov 2011 8.5
Mid-Dec 2011 7.5
Mid-Jan 2012 6.8
Mid-Feb 2012 7.0
Mid-March 2012 7.0
Mid-April 2012 7.5
Mid-May 2012 8.7
Mid-June 2012 9.9
Source: Nepal Rastra Bank/ The Kathmandu Post
Monday, June 4, 2012
Gold hits historic high of Rs 56,800
KATHMANDU, JUNE 4, 2012
The precious yellow metal has reached another height in the domestic market due to the weakening rupee and rising international prices. Gold price was fixed at Rs 56,800 per tola (11.664 grams) today –– Rs 1,600 higher than yesterday’s price.
The international bullion market saw the price of gold rallying up on the cue of weak employment numbers in the US. On Friday, the discouraging US employment result shifted the focus of the investors from the US dollar to a more dependent safe haven gold.
Last month, gold was feared to have entered a bearish run as the weakening euro had driven investors to dollars instead of gold. Now, since the US economy also seems to be in troubled waters along with the Eurozone, gold has reclaimed its throne.
The strong dollar against the Nepali currency has also contributed in pushing the price of gold to its current high. The exchange rate for the dollar being around Rs 90 pushed the prices up despite gold being traded approximately at $1650 per ounce in the international commodities markets.
Gold had reached its earlier record of Rs 56,000 on May 4 after the government hiked the customs duty. The future of Greece staying in the euro along with the questionable Spanish solvency situation had already propelled the flight of investors to dollars and now with the escalated jobless rate in USA, gold is expected to go bull once again.
Source: THT
The precious yellow metal has reached another height in the domestic market due to the weakening rupee and rising international prices. Gold price was fixed at Rs 56,800 per tola (11.664 grams) today –– Rs 1,600 higher than yesterday’s price.
The international bullion market saw the price of gold rallying up on the cue of weak employment numbers in the US. On Friday, the discouraging US employment result shifted the focus of the investors from the US dollar to a more dependent safe haven gold.
Last month, gold was feared to have entered a bearish run as the weakening euro had driven investors to dollars instead of gold. Now, since the US economy also seems to be in troubled waters along with the Eurozone, gold has reclaimed its throne.
The strong dollar against the Nepali currency has also contributed in pushing the price of gold to its current high. The exchange rate for the dollar being around Rs 90 pushed the prices up despite gold being traded approximately at $1650 per ounce in the international commodities markets.
Gold had reached its earlier record of Rs 56,000 on May 4 after the government hiked the customs duty. The future of Greece staying in the euro along with the questionable Spanish solvency situation had already propelled the flight of investors to dollars and now with the escalated jobless rate in USA, gold is expected to go bull once again.
Source: THT
Tuesday, May 8, 2012
Commodities market awaits reform
KATHMANDU, MAY 8, 2012
The commodities market is suspected to be engaging about one-third of the total market capitalisation of Nepse as an investment. The commodities market of Nepal consists of six commodity exchanges, 20,000 investors, 200 brokers and 400 sub-brokers, according to the interim report submitted by a study team which was assigned to conduct a research on the country’s commodity market.
The capital market though has only one stock exchange, 47 brokers and 300,000 investors and handles daily transactions worth Rs 10 million on average. The active investors engaged in stock trading and frequent secondary transaction, however, is estimated to be as less as 15,000.
“Though the actual amount is yet to be calculated, the initial draft suggests that the overall money involved in the commodities market could be as high as Rs 100 billion,” pointed out an official closely associated with the study at Securities Board of Nepal (Sebon), which has been commissioned to undertake the role of a regulator of the commodities market.
Nepse’s market capitalisation stands at Rs 381 billion with 215 companies and around 25 types of bonds listed. “The size and amount of money that appears to be involved in the market signals the urgent need to bring them under a regulatory net else a huge financial disaster is round the corner,” said the official.
The High Level Financial Coordination Committee had asked the capital market regulator to conduct a detailed study in order to draft the regulation. The study committee that has already submitted the first draft is supposed to submit its final report by mid-May.
Based on the findings of the study, Sebon and concerned regulators will design the regulation. Sebon is seeking to amend the Securities Act-2063 to include the commodities market to regulate it. Despite handling such a huge amount of public’s money, there are no regulations in place, thus drafting a law to bring them under some control as soon as possible is an imperative.
“There is no regulation or guideline that protects the interest of the investors who have been investing through these exchanges in different commodities trading making their situation extremely vulnerable,” he pointed out. These exchanges have started their businesses by only obtaining a licence from Company Registrar’s Office under the Company Act.
“The Company Act is extremely vague and is not strong enough and has left the regulation and supervision to respective regulators that govern specific companies,” he added. The commodity exchanges that had requested the government for a regulator time and again had initially refused to cooperate with the study.
“Their hesitation in sharing information has raised suspicion that they could be involved in deals that are not in the interest of the investors,” said the officer. The huge size of the commodities market on one hand and the relatively smaller capacity of Sebon on the other has even raised questions whether the capital market regulator will be able to effectively regulate the technically mind boggling and complicated market.
Source: THT
The commodities market is suspected to be engaging about one-third of the total market capitalisation of Nepse as an investment. The commodities market of Nepal consists of six commodity exchanges, 20,000 investors, 200 brokers and 400 sub-brokers, according to the interim report submitted by a study team which was assigned to conduct a research on the country’s commodity market.
The capital market though has only one stock exchange, 47 brokers and 300,000 investors and handles daily transactions worth Rs 10 million on average. The active investors engaged in stock trading and frequent secondary transaction, however, is estimated to be as less as 15,000.
“Though the actual amount is yet to be calculated, the initial draft suggests that the overall money involved in the commodities market could be as high as Rs 100 billion,” pointed out an official closely associated with the study at Securities Board of Nepal (Sebon), which has been commissioned to undertake the role of a regulator of the commodities market.
Nepse’s market capitalisation stands at Rs 381 billion with 215 companies and around 25 types of bonds listed. “The size and amount of money that appears to be involved in the market signals the urgent need to bring them under a regulatory net else a huge financial disaster is round the corner,” said the official.
The High Level Financial Coordination Committee had asked the capital market regulator to conduct a detailed study in order to draft the regulation. The study committee that has already submitted the first draft is supposed to submit its final report by mid-May.
Based on the findings of the study, Sebon and concerned regulators will design the regulation. Sebon is seeking to amend the Securities Act-2063 to include the commodities market to regulate it. Despite handling such a huge amount of public’s money, there are no regulations in place, thus drafting a law to bring them under some control as soon as possible is an imperative.
“There is no regulation or guideline that protects the interest of the investors who have been investing through these exchanges in different commodities trading making their situation extremely vulnerable,” he pointed out. These exchanges have started their businesses by only obtaining a licence from Company Registrar’s Office under the Company Act.
“The Company Act is extremely vague and is not strong enough and has left the regulation and supervision to respective regulators that govern specific companies,” he added. The commodity exchanges that had requested the government for a regulator time and again had initially refused to cooperate with the study.
“Their hesitation in sharing information has raised suspicion that they could be involved in deals that are not in the interest of the investors,” said the officer. The huge size of the commodities market on one hand and the relatively smaller capacity of Sebon on the other has even raised questions whether the capital market regulator will be able to effectively regulate the technically mind boggling and complicated market.
Source: THT
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