Gold imports lead to CAD |
Gold imports in India surged by 93.86 per cent year-on-year to $4.98 billion in March 2015 due to declining prices and easing of restrictions by the RBI. Imports of the precious metal stood at $2.57 billion in March 2014. Any increase in gold imports, in turn, impacts the current account deficit (CAD). The CAD in the first half of this fiscal declined to 1.9 per cent of GDP ($18 billion) from 3.1 per cent ($27 billion) in the same period of 2014. The Reserve Bank and the government have maintained that the CAD level is comfortable, but the spike in gold imports may spark fresh worries.
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