By Paul Ploumis 29 Jul 2015 Last updated at 08:44:40 GMT
NEW DELHI (Scrap Monster): The banks in Nepal had suspended import of gold on account of declining domestic demand. According to Nepal Bankers’ Association (NBA), banks in the country have not imported gold since the beginning of the current fiscal year. As a result, banks are running out of stocks. The Association data indicate that local banks held only around 200 kilograms of gold as on last Friday.
The country had reported extremely weak demand for gold since the last quarter of the previous fiscal year, which led to suspension of gold imports by country’s commercial banks. However, several factors have contributed to sudden rise in demand for gold among consumers. According to traders, the sharp fall in gold prices has created a rush among customers to initiate fresh buys in the yellow metal. The daily demand for gold has jumped from usual 15-20 kilograms to as high as 50 kilograms.
Earlier, bullion traders used to buy gold from unofficial importers, as they offered significant price advantage when compared with the bullion shipped through official channels. However, the recent government decision to slash the import duty on gold has narrowed the price gap. As a result, there has been a sudden rise in demand for bank gold from traders.
Meantime, traders in the country alleged that banks in the country were hesitant to provide gold, despite having adequate stocks. On the other hand, jewellers noted that are not having enough gold to meet rising customer demand. They alleged that traders are attempting to hoard gold with the aim of selling it at higher prices. Many jewellers in the country are reportedly using recycled gold to meet the demand from regular customers. A good number of jewellery shops have gone out of stock.