Curbs on gold imports to hold rupee: Report

New Delhi (PTI): RBI measures to curb gold imports show that the central bank will try to hold the Indian rupee in the range of Rs 52-56 against the US dollar, Bank of America Merrill Lynch (BofA-ML) has said. According to research report, the curbs would likely pose a $5-10 billion downside risk to BofAML's $55 billion gold import forecast for the 2013-14 fiscal.

"The RBI's measures to curb gold imports support our view that it will try to hold Rs 52-56/$ if the US Dollar trades in a 1.30s-1.20s/euro band," research note said, adding that the rupee is likely to end June at Rs 54.5/$. RBI on Tuesday extended the restrictions on gold import to other agencies in addition to banks, a move aimed at curtailing demand for the precious metal for domestic use amid widening current account deficit. On May 13, such restrictions were put on banks. Besides, it had also put restrictions on banks and NBFCs for providing loans against gold coins as well as units of gold ETFs. The government has also taken steps like hike in import duty to restrict gold imports. The import of the yellow metal during the first two months of the current fiscal, 2013-14 is estimated at $15 billion. Gold imports by India, the world's largest consumer, stood at 860 tonnes in 2012.