Saturday, November 29, 2014

HOT India Eases Import Restriction on Gold

In a surprise move, bullish for gold, India on Friday ended one of the restrictions on gold imports put in place last year to reduce the country's chronic current-account deficit.

The Reserve Bank of India said the government had decided to end the requirement that gold importers be able to prove that at least 20% of the precious metal they brought into the country would become jewelry exports. Gold prices in India and gold smuggling shot up, as imports dwindled as a result.

The restriction, dubbed the "20:80 rule," was adopted in August 2013 to keep India's widening current-account deficit in check. "It has been decided by the government of India to withdraw the 20:80 scheme and restrictions placed on import of gold," the central bank said.

India is the world's second-largest consumer of gold, which is traditionally used for jewelry and as one of the main sources of savings in the country where hundreds of millions of people do not have bank accounts.

1 comment:

  1. So, when are gold prices going to explode upward? Stocks up, gold down. humm.