Between January and March this year, our current account deficit was around $32 billion. The value of RBI's gold in mid-March was $26 billion. India imports around 800 tonnes gold annually. So, in one stroke, we could cut the annual import of physical gold by 70% and the quarterly current account deficit by 80%.
Is it enough? May be not, but it will certainly be a start. It will have the added benefit of keeping a lid on the global gold market, where jewellery demand from India is still the single biggest pull factor. Read More