India’s central bank plans more gold import curbs


Published — Thursday 7 February 2013

Last update 7 February 2013 12:34 am

| نسخة PDF Print News | A A

MUMBAI: India's central bank said yesterday it will consider more steps to restrict gold imports and help stem the country's widening current account deficit.
Gold purchases are one of the biggest contributors to the deficit in the current account, the broadest measure of trade. It hit a record $ 22.3 billion, or 5.4 percent of GDP, in the July-September quarter, as imports outpaced exports.
"The need to contain the demand for gold imports is critical in a country with insatiable demand for the yellow metal," a Reserve Bank of India (RBI) report said yesterday.
"Given the precarious global economic situation and its impact on the Indian exports, there is a clear need to reduce the current account deficit considerably."
India imports about 900 tonnes of gold each year, mainly through designated banks. The government last month increased the import duty on gold to six percent from four percent earlier.
The RBI said yesterday it would consider introducing gold-linked financial instruments to divert savings of people from gold bars and coins into bonds.
India is the world's biggest consumer of gold, with purchases an essential part of religious festivals and weddings.
Many Indians — especially in rural areas where there are few banks — purchase gold in the form of jewelry, bars and coins as a hedge against inflation.
"Creation of an alternative asset class that may provide returns comparable to that in physical gold with similar flexibility is important," the RBI said.
The bank said it may consider setting up a "Gold Bank" or Bullion Corporation of India, which can pool the large amounts of scrap gold in India to reduce imports of the precious metal.

What's happening around Saudi Arabia

RIYADH: Thirty-three of the 34 Middle East Respiratory Syndrome (MERS) coronavirus cases in the Kingdom were reported from Riyadh and one from Najran, the weekly report released here by the Ministry of Health said on Monday. The report, which covered...
• Which particular aspect of Saudi Arabia you like the most? Its warm hearted people and the unique Saudi humor.• Can you tell us your favorite and oft-repeated Arabic word? Hala wallah!• Which book is now on your bedside? “Socialdemokratiske Taenke...
RIYADH: The father of the Saudis who were allegedly assaulted by Turkish authorities at Istanbul airport intends to take legal action against the officials.Abdullah Al-Monaiser said the brutal encounter resulted in a broken nose and various bruises o...
DAMMAM: The Kingdom needs to lay stress on buildings that are earthquake resistant, especially in regions like Dammam and Alkhobar which are more vulnerable, a study has said.The country is close to areas that have significant seismic activity, like...
JEDDAH: The Saudi Electricity Company, National Water Company and the country’s telecommunication firms are to blame for the deterioration of the city’s roads because of poor workmanship.This is the conclusion of a study conducted by a specialized fo...
JEDDAH: The Insan Charity Committee for Orphans’ Care distributed more than 21,000 schoolbags worth SR2,147,600 among the students of primary and middle schools in all its 16 branches, according to a website.The amount allocated for schoolbags was di...

Stay Connected