In August, India imported 121 tonnes of gold, according to a report from Reuters . This was almost twice what it bought in August 2020, 63 tonnes. In the first eight months of this year, the country’s gold imports went up three-fold compared to the same period of 2020, to 687 tonnes.
2020 was an anomaly thanks to the global pandemic. In the April-June quarter of 2020, the Indian economy shrank by around 24% but in the same quarter of this year it grew by more than 20%. The government says that consumer price inflation this year is likely to be 5%-6%, although the inflation for many basic food commodities is running much higher; local cooking oil prices in July were about 33% higher than the previous year.
In the period running up to Diwali, the festival of light – which falls on 4 November this year – Indians traditionally buy and give gold. India’s jewellers and gold retailers took advantage of the gold price dip in early August to build up inventory ahead of this year’s festivities and expected upsurge in gold buying. The exchange value of India’s currency, the Rupee, against the US Dollar has fallen by more than 2,000% since the country gained independence in 1947.
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