Jewellers in Bangladesh yesterday decided to increase the price of gold by Tk 1,167 per bhori (11.664 grames), according to the Bangladesh Jeweller's Association (Bajus).

The standing committee on pricing and price monitoring of Bajus took the decision in a meeting citing the rise in pure gold prices, said a statement from the association.

Effective today, each bhori of 22-carat gold will cost Tk 109,292, up from Tk 108,125 previously.

The cost of silver has also increased, with good quality 22-carat silver now priced at Tk 2,100 per bhori while it was Tk 1,715 per bhori till Monday.

Gold prices hit a new milestone on November 29, when Bajus set the price per bhori at more than Tk 1.09 lakh, with prices having crossed the Tk 1 lakh-mark in July for the first time.

Even though Bangladesh does not import a significant quantity of gold, the prices are almost always linked with international fluctuations along with volatility in the domestic market.

With an annual demand of 20 to 40 tonnes, 80 percent of the country's demand for gold is met through smuggling.

In August last year, Bangladesh Bank made it mandatory to keep a 100 percent margin on letters of credit for gold with a view to discouraging imports and save foreign currency.

The country's foreign currency reserve has declined by about 25 percent in the past 18 months.