By Laxman Kafle
Kathmandu, Dec. 12: The import of silver has increased excessively during the first four months of the current fiscal year.
According to the statistics of Trade and Export Promotion Centre (TEPC), silver worth around Rs. 14.36 billion has been imported in the first four months of the current fiscal year. Silver import has increased by 10 times (998.3 per cent) compared to the same period of the previous year.

According to the TEPC, silver only worth Rs. 1.32 billion was imported during the first four months of the last fiscal year 2020/21.
However, silver worth Rs. 9.88 billion had been imported in the last fiscal year 2020/21 and Rs. 9.49 billion in the fiscal year 2019/20 and Rs. 16.8 billion in the fiscal year 2018/19.
Similarly, the import of gold has also increased by 306 per cent to Rs. 14.95 billion during the first four months of the current fiscal year. Gold worth Rs. 3.68 billion had been imported during the first four months of the last fiscal year.

The gold worth Rs. 27.40 billion in the fiscal year 2020/21, Rs. 13.63 billion in 2019/20 and Rs.34.63 billion in the fiscal year 2018/19 had been imported.
However, imports were significantly affected by the COVID-19 pandemic last year.

NRB takes measures to control silver import
After the import of silver has increased unnaturally from the beginning of the current fiscal year, NRB has already taken measures to control the import of the white metal.
Nepal Rastra Bank (NRB), which is under pressure due to high trade deficit, declining remittances and foreign exchange reserves, has tightened silver import since the end of November, 2021.

"Silver imports appear a bit unnatural compared to previous years," said Narayan Prasad Pokharel, information officer at Nepal Rastra Bank. "We have tightened some provisions."
The NRB issued a directive on November 29 stating that commercial banks and entrepreneurs will be allowed to import silver through the Open Market Import License (OGL) and will provide an exchange facility of only 35,000 dollars or its equivalent per import.

Similarly, imported silver can be used only for making jewellery and handicrafts.
The government had recently increased the customs duty on silver import to Rs. 10,700 per kg from Rs. 8,500.
Earlier, the NRB had tightened gold imports and sales, but silver had been left open. NRB has tightened the import of silver after the bulging import of silver, Pokharel said.

Traders admit unnatural silver import
Even the traders accepted silver import had grown unnaturally this year.
Tej Ratna Shakya, former president of the Federation of Nepalese Gold and Silver Dealers' Association, said, "We had also suggested the NRB to tighten the rules as it seems that more silver has been imported than we need."

According to Shakya, the NRB's arrangement of providing an exchange facility of 35,000 dollars or its equivalent per import is not practical but the provision to increase customs is good to control silver import.
“The import of silver is higher than the domestic demand. But we do not know why the import of silver has become high and where it goes,” he said.

He said that despite appropriate measures to curb the unnatural import of silver by raising the customs duty, the decision to provide an exchange facility of only 35,000 dollars or equivalent has halted the import of silver.
The market has started facing the shortage of silver over the days after curbing the import, he said.