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India restricts gold imports even further: bans coins, medallions

Seeking to curb gold imports, India’s Reserve Bank banned Wednesday the sale of gold coins, medallions and dores without a licence from the foreign trade office.

The measure come only a day after the government raised the import tax on the yellow metal for the third time this year, from 8% to 10%.

According to Domain-B, the bank stated that “supply of gold in any form to the domestic users other than against full payment upfront shall not be permitted.”

The decision to force cash payments restores an earlier central bank directive, which was discarded last month.

After dropping significantly in June, the country bought in July close to 47 tonnes of gold, compared to the 31 tonnes imported the previous month.

The country’s current account deficit is nearly 5% and gold is a major driver behind that figure, second only to oil.

According to some estimates, Indian households are hoarding close to 20,000 tonnes of gold worth some $1 trillion, representing 50% of the country’s GDP.

Image from Wikimedia Commons