by Shivom Seth, MineWeb.com
The Indian government is expected to cut import duty on gold by 2% from the current 10%, in the forthcoming Budget announcement early next month. With local jewellers running out of inventory, a leading US brokerage has said that the Indian government would, sooner than later, have to withdraw gold import restrictions, given the level of inventory as well as the impending drought situation that could moderate gold import demand.
Bank of America Merrill Lynch (BoAML) said in a report, “We expect the current account deficit to widen to 2.6% of GDP in FY15 from 1.7% in FY14, especially as latent demand could lead to a spike in gold import demand. The March quarter current account deficit came in at $1.3 billion. Net gold imports will increase to $40 billion or 2% of GDP in FY15, from $28.8 billion or 1.5% this past fiscal year.”
Gold imports in the first six months of the year could have tumbled 77% to 150 metric tonnes, from 650 metric tonnes in the corresponding period of last year, agency report said.
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