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© GRAPHIC NEWS

© GRAPHIC NEWS

© GRAPHIC NEWS

Graphic shows gold imports in first 11 months of 2016. India is the world’s second largest consumer of gold after China.
GN34938EN

BUSINESS

India’s gold market

By Duncan Mil

December 14, 2016 - Gold imports are on track to drop to their lowest in five years, driven by higher prices, an excise tax and the government’s ban on high-value banknotes. “Black money is used to buy one-third of India’s gold.”

Indians’ great love for gold has created severe and ongoing economic issues for the nation. Australian investment bank Macquarie has estimated that 78% of India’s household savings are held in gold.

Building up savings in gold rather than deposits in effect means that India has a dual currency. Because the savings do not increase the available funds for lending within the banking system, this creates a permanent drag on India’s growth.

Sources
PUBLISHED: 14/12/2016; STORY: Graphic News
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