NEW DELHI, May 15- Describing the 138 per cent surge in gold imports last month as an “aberration”, the government on Tuesday expressed hope that demand for foreign gold would subside by next month due to high inventory costs.
The recent surge in imports has attributed to reduction in global commodity prices including gold, Press Trust of India (PTI) reported.
Economic Affairs Secretary Arvind Mayaram said it appears that in order to hedge against future rise, Indian traders have imported large quantities of gold.
“It’s an abberation. But then, there is a limit how much you can buy and hold, because there is carrying cost to that. I believe we will see correction by next month.
And we don’t believe imports are going to be at the same level,” he said. The rise in gold imports is a concern for policy makers as it puts pressure on the Current Account Deficit (CAD), affecting foreign exchange situation.
Planning Commission deputy chairman Montek Singh Ahluwalia also believes there would be a significant fall in gold imports in the current fiscal.
“Traders make decisions on gold imports several months in advance, so I don’t know to what extent the actual import took place. I don’t think gold imports will continue.
“I would expect in the 2013-14 period, given the changing economic situation that there will be significant easing off of gold imports.” India’s gold imports reached 830 tonne in 2012-13 fiscal.
Gold imports jumped its highest this year by 138 per cent to US$7.5 billion last month, pushing up trade deficit to US$17.7 billion and could worsen CAD this fiscal.
-BERNAMA
