India's Central Bank to curb nation’s climbing gold demand
In the wake of government measures to restrict the increasing demand for physical gold in the country, the Reserve Bank of India —the nation's central bank— has announced new bullion schemes to moderate imports of the shiny yellow metal.
According to The Bullion Street, the draft report of a panel constituted by the RBI warns the South East nation must moderate gold imports or its economic stability will be jeopardized.
Last week P. Chidambaram, the country’s finance minister, said measures are urgently needed as gold imports are causing a $64 billion fiscal deficit.
The group also says financial products designed to provide returns equivalent to that of the precious metal could turn away investors from buying gold.
According to figures from The World Gold Council, India is currently the world's main gold consumer and it is estimated that about 10% of the global gold is in India's hands.
The yellow precious metal contributes to nearly 30% of the country’s trade deficit. From 2002 to 2012, India’s yearly gold demand remained moderately even at about 700 to 900 tonnes.