India's central bank said Wednesday 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 on Wednesday.
"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.
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