Restrictions on Gold Import Relaxed! Prospects of fall in gold prices!
Posted on: 29/Nov/2014 2:44:41 PM
The central government has relaxed the restrictions imposed on gold import.
Reserve Bank of India has withdrawn the stipulation that 20% of the imported gold should be exported as gold jewellery.
According to market expert, there are bright prospects of fall in gold prices after this relaxation.
Stock of gold on hand will increase thereby giving the possibility of fall in price of gold.
The rule that 20% of the imported gold must be exported as gold jewellery was imposed as a measure to restrict expenditure of Foreign Exchange. Import duty was also increased by 10%.
This measure severely affected the jewellery industry. Smuggling of gold increased.
However, there was no reduction in the quantity of gold imported.
When it was expected that there would be more restrictions, RBI’s latest decision to relax gold import is an unexpected reversal.
