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HindustanTimes Sat,19 Apr 2014

High inflation prompts more gold buys: RBI

Reuters  Pune, March 05, 2013
First Published: 22:21 IST(5/3/2013) | Last Updated: 22:24 IST(5/3/2013)

Reserve Bank of India governor Duvvuri Subbarao expressed concern that high inflation was forcing people to indulge in buying gold rather than deositing funds with banks.

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The government has announced several measures to discourage people from buying gold and prodding them to invest in financial instruments.

Deposits were up 11.2% in the first 10 months of financial year 2012-13, compared with 11.5% in the year-ago period.

Meanwhile, finance ministry’s chief economic adviser Raghuram Rajan said that the record high current account deficit (CAD) is the country’s biggest concern.

CAD widened to a record high of 5.4% of GDP in the September quarter as export growth slowed more sharply than imports, with a similar gap expected in the December quarter likely to prolong weakness in the rupee.

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