KARACHI, Sept 13: The decision of allowing licence free import of gold in July has now got a jolt as gold dealers and importers have virtually stopped lifting the UAE dirham and the US dollar from the currency dealers to finance their imports.
The government decision in the trade policy 2002-03 to liberalize gold imports had injected new enthusiasm among traders and importers but after a month it could not maintain the same fervour among gold dealers.
“Lifting of the dirham and the dollar by gold dealers and importers have been completely suspended for the last one month,” Mohammad Ali Motiwalla of currency brokerage Galaxy International told Dawn on Friday.
He quoted some importers saying that import of gold is not lucrative any more. He recalled that there was a big demand of the dollar and the dirham in July and more than 25 million dirhams were sold by the money exchangers in Karachi in just three days of the government decision.
“I cannot tell you the exact lifting of these currencies by the bullion dealers, but the amount is definitely quite big,” Ali said.
“Now the situation is totally different as bullion dealers are not turning up to buy foreign currencies for gold import purposes,” he said.
In 2002-03 trade policy, the government had done away with the condition of seeking a licence from the government to import gold. Any importer can pay the duty at the rate of one dollar per tola and arrange foreign exchange for this purpose through his own resources.
A spokesman of Karachi Sarafa and Jewellers Group (KSJG) also confirmed that there has been no gold import by dealers as the bullion rates in Dubai is higher as compared to Pakistan.
Chairman, All Pakistan Gem Merchants and Jewellers Association (APGMJA), Kamran Khan, said the government decision to liberalize gold imports had not encouraged bullion dealers.
“Gold dealers/importers have not brought in any quantity (not a single tola) since July,” he claimed, asking the commerce minister to tell how much revenue has been generated by the government since July through gold imports.
However, APGMJA vice chairman Raisuddin Shaikh while claiming that no imports of gold had been taken place, said the local and international markets had been uncertain as far as rates are concerned.
“Only stability in prices in both the local and foreign markets may lure dealers to import gold, otherwise chances are remote for gold imports in future,” he said, adding that international prices are still very high.
Kamran Khan said the government was set to lose $10 million revenue per annum, which were being paid by six regular importers.
He said smuggling of gold had been going on since July as smugglers were now finding it easy to operate under the garb of liberal import policy. He said licensed gold importers were paying the duty in advance to the banks concerned and there was no question of duty evasion.
The APGMJA chief said that liberal imports had now opened the doors of corruption and people found it easy to give few thousands of rupees to customs officials rather than paying the duty.
