By A Staff Reporter
Kathmandu, Feb. 23: Gold business has returned to normalcy in the local market with declined impact of COVID-19 and significant reduction in gold price.
The gold trade, which started improving in November last year with the arrival of wedding season, is still going strong. According to businessmen, 20 kg gold is being traded daily at present.
According to Manik Ratna Shakya, president of the Federation of Nepal Gold and Silver Dealers’ Association, on average 20 kg of gold is being sold daily. The daily turnover of gold in the wedding season is over 40 kg.
He said that the short supply of gold against its growing demand had affected the market which is moving towards revival.
“We are talking with the concerned authorities, including Nepal Rastra Bank (NRB), to increase the gold import quota to meet the local demand.
Currently, the NRB allows commercial banks to import 10 kg of gold daily and distribute them in the market.
During COVID-19 pandemic, the government had reduced the gold import quota to 10 kg a day from 20 kilograms earlier, citing pressure on foreign exchange reserves.
The transaction of gold and silver was almost nil for seven months after the government imposed nationwide lockdown to prevent and control coronavirus transmission since March 24, 2020.
At that time, the gold that had piled up was used up for marriage season. But now there is a daily demand of 20 kg of gold but since the import is limited to10 kg, the businessmen are in trouble.
Shakya said that the quota should be increased as the businesses in all sectors have started expanding.
The price of gold has been declining for the last few weeks – a phenomena attributed to increased demand for gold.
The price of gold, which had reached Rs. 103,500 per tola on August 2020, has dropped to Rs. 89,000 at present.
10% gold dealers displaced due to COVID-19
Shakya said that about 10 per cent gold entrepreneurs were displaced from the business due to the impact of COVID-19.
“About 2,000 businessmen left gold business in the wake of prolonged COVID-19 pandemic. They were unable to make finances due to the closure of their shops for almost seven months,” he said.
There are around 20,000 gold entrepreneurs across the country. Of them, around 1,000 are inside the Kathmandu Valley.
Shakya said that they were holding talks with the NRB to introduce relief package targeting the gold entrepreneurs to protect the gold business and entrepreneurs.