Gold imports may decline 50% in FY14 on RBI curbs: MMTC
India's gold imports are expected to fall by 50% to below 500 tonne this fiscal if the Reserve Bank's recent move to restrict banks' bullion imports is made effective, a senior MMTC official said.business Updated: May 12, 2013 11:27 IST
India's gold imports are expected to fall by 50% to below 500 tonne this fiscal if the Reserve Bank's recent move to restrict banks' bullion imports is made effective, a senior MMTC official said.
Gold imports into India, the world's largest consumer of the metal, stood at around 830 tonne in 2012-13, he said.
In its annual monetary policy for 2013-14 released early this month, RBI proposed to tighten regulations for overseas purchase of gold by banks and restrict loan facility to curb gold import and rein in Current Account Deficit.
It had said it will come out with detailed guidelines by May-end.
"If the RBI notifies these curbs, the country's overall gold imports will be hurt and the volumes will fall by 50% in the current fiscal," state-run MMTC general manager of the Precious Metals Division Ashwini Kapoor said.
If the notification is not released, the country's overall gold imports are likely to touch the 1,000-tonne mark this year as downtrend in prices of the yellow metal have pushed up the domestic demand significantly, he noted.
Kapoor said MMTC's overseas purchase of gold could increase sharply to 200 tonne, as against 38 tonne last year, if the RBI curbs are not imposed.
Gold prices have declined by 15% to Rs 27,500 per 10 grams now as against Rs 32,000 per ten grams in the year-ago period.
The country's annual gold demand is around 800 tonne and this might go up if downtrend in prices of the yellow metal remain through this year, Kapoor added.