India’s gold imports slipped by 95 percent in August, just 2.5 tonne from month before, slackening pressure on policymakers as they struggle to control the downgrading Indian rupee against the US dollar.
India’s gold imports slipped by 95 percent in August, just 2.5 tonne from month before, slackening pressure on policymakers as they struggle to control the downgrading Indian rupee against the US dollar, while attending to high current account deficit (CAD).
According to official data, gold imports last month slumped from 47.5 tonne in July, 31.5 tonne in June, 162 tonne in May and 142.50 tonne in April.
Bullion industry said that gold purchases from abroad toppled due to lack of clarity on the recent Reserve Bank of India guidelines on imports, coupled with an absence of festivals, limited demand from jewellers in India.
The government is frantically trying to curtail non-essential imports, including gold, with intend to cut down the CAD from 4.8% of the gross domestic product (GDP) last fiscal to 3.7% of the GDP in 2013-14.
So far, the rupee has plummeted by more than 20 percent in this fiscal year.
The gold imports bunged after July 22 due to perplexity over a measure issued by the central bank, which made it mandatory for importers to re-export at least 20% of all the purchases from overseas, and jewellers started using stocks that had piled up in April and May.
The RBI measure aimed at control the flow of yellow metal into the country but the importing agencies took time to understand the actions involved.
However, experts said the imports may again ascend by around 30 tonnes in September, as the traders start building inventory to supply during the festival and marriage season from October but the growth will remain submissive due to government’s crackdown on overseas purchases.
Reportedly, gold is India’s most expensive non-essential import, accounting for 13.3 percent of the total bill and helping to push the current account deficit to $88 billion, or a record 4.8 percent of GDP, in 2012/13.