India’s Easing of Gold Import Rules Will Not Increase Deficit

The Reserve Bank’s move to ease gold import norms is unlikely to exert upward pressure on the current account deficit, industry body Assocham today said.

The RBI had earlier eased gold import norms by allowing select trading houses, in addition to already permitted banks, to procure the precious metal to boost exports.

“Assuming a monthly average gold import of 40 tonnes for first quarter of 2014-15 and 80 tonnes for the remaining three quarters, total imports for the current fiscal will tantamount to 840 tonnes vis-a-vis 586 tonnes in 2013-14.

“While the 80-20 rule would still put some downside pressure on our estimate, we believe the impact would be offset by the likely upside risk that phased normaliaation of custom duty could bring-in,” Assocham President Rana Kapoor said.

via India Times

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza