Investor interest in silver trading in Nepal

Cinepatra/Kathmandu

There has been an overwhelming surge of investor interest in silver trading in Nepal.

According to customs data, silver imports have reached an all-time high this year due to excessive demand from investors.

From Shrawan to Magh 2082 (the first seven months of the current fiscal year), Nepal imported 82.4 million grams of silver worth Rs. 24 billion. In terms of import value, no previous year has recorded such a high level of silver imports. Quantitatively as well, this is the highest import volume in the past 10 years for the same seven-month period.

In comparison, during the first seven months of the previous fiscal year, only 29.1 million grams of silver worth Rs. 4 billion were imported. However, in the single month of Magh alone, nearly Rs. 10 billion worth of silver was imported through various customs points.

Until the second week of Magh, the market experienced extremely high demand, and silver was scarcely available. But after large-scale imports in the following days, traders say there is currently no shortage of silver in the market.

Although demand has slightly declined compared to Magh, silver trading remains significantly higher than in previous years.

Unlike gold, which can only be imported by banks and traded by authorized dealers—and is not freely available to the general public as an investment—there are no such strict restrictions on silver. The general public is allowed to trade and invest in silver, which traders say is one of the key reasons for the rising investment.

There are no major restrictions on silver transactions. Individuals are also purchasing silver for trading and investment purposes.

However, a single trader is not allowed to import large quantities alone. Industries that manufacture silver jewelry or products for export are permitted to import up to $2 million worth of silver per month under export conditions.

General traders are allowed to import up to $500,000 worth of silver per month.

Last Bhadra, Nepal Rastra Bank increased the import limit for silver meant for industrial purposes. Businesses are now allowed foreign exchange facilities of up to $500,000 at a time for importing silver as a raw material for industrial use, up from the previous $300,000 limit.

Former President of the Federation of Nepal Gold and Silver Dealers’ Association, Tejaratna Shakya, argues that the number of traders importing gold has also increased in recent months, contributing to imports reaching up to Rs. 10 billion in a single month.

Since investing in gold requires larger capital, many people who cannot afford it are diverting their investment toward silver. Traders say both investment in silver and demand for it are on the rise.

According to them, silver is increasingly being purchased for investment purposes rather than for utensils. In recent days, trading of silver bars has significantly increased.

Globally, silver demand is high for industrial uses such as solar energy and IT sectors, as well as for investment instruments. With projections that prices may rise further, demand in Nepal has also increased.

Traders say that widespread rumors of rising prices have encouraged large buyers to purchase silver as an investment.

Indeed, silver prices have risen sharply in recent times. Within just the past month and a half, market prices have increased by about 50 percent.

In the local market, silver was traded at Rs. 3,840 per tola on Poush 1, but by Falgun 15, the price had climbed to Rs. 5,740 per tola.