UBS: Planned Easing of Indian Gold-Import Rules 'Welcomed' By Market, But To Be Gradual

Mumbai-India (Apr 3)  News that Indian authorities plan to start relaxing restrictions on gold imports is favorable for gold, but any changes likely will be implemented slowly, says UBS. The governor of India’s central bank said Wednesday that an easing of the current-account deficit will allow for some easing of import rules that included a 10% duty and a rule that required 20% of gold imports be re-exported as finished products. “The headlines (about easing the rules) were easily welcomed by the gold market, especially during the current period of lackluster physical demand,” UBS says. “This would mark an important step towards regaining some normalcy in the Indian gold market and is overall a positive for gold. Nevertheless, it is crucial that market does not get carried away by these headlines; no official changes have yet been announced. More clarity is needed on what restrictions are going to be ‘removed’ and/or what type of easing in regulations is on the cards, as well as timings. Importantly, the RBI emphasized that the measures to ease current regulations on the local gold market would be small and would be introduced slowly.”

Source: KitcoNews