KATHMANDU, Sept. 3 (Xinhua) -- Nepali government has imposed a ban on gold imports to deal with the mounting pressure such imports been exerting on the country's foreign currency reserves.
"We have decided to completely bar the imports from Friday and the decision will remain in effect till further notice," Ganesh Dhakal, joint-secretary at the Ministry of Commerce and Supplies ( MoCS), told Friday's Republica daily.
Officials stated that MoCS took such a decision mainly on request from the central bank, as soaring imports of the yellow metal continued to put pressure on the country's foreign currency reserves.
Nepal has been suffering a huge trade deficit, mainly due to multifold increments in imports compared to exports. Propelled by widening trade deficit along with slowing growth in remittances, the balance of payments has been in negative territory also since the first quarter of last fiscal year.
While a rapid rise in gold imports was one of the factors behind this state of affairs, Nepal Rastra Bank, the central bank of the country, despite controlling its supply, has been facing a tough time bringing the situation under control.