Indian gold imports boosted by strong rupee

Gold imports to India are set to soar in the financial year to March 2008, due in part to the strength of the rupee.

Sanjiv Batra, chairman and managing director of India's largest gold importer, MMTC, told Reuters today that imports were up by 25 per cent in the four months from April to July.

Imports hit 350 tons in the period, up from just 280 tons in the same period in 2006, Mr Batra observed.

He suggested that gold imports in the year to March 2008 would reach 850 to 900 tons, as a result of the gold buying spree instigated by a stronger rupee.

Mr Batra also pointed to the impact that the festival season will have, as individuals are encouraged to purchase gold to celebrate a number of significant religious dates.

"Now that the festival season is starting the trend should be good. I think we should cross or touch maybe 850 to 900 tonnes this year," he told the news agency.

The rupee reached a nine-year high of 40.20 to the dollar in July and is now trading at around 41 to the dollar, which is inevitably boosting demand for gold.