India's bank note ban to disrupt gold-smuggling business

Section:

A thousand-rupee note is worth less than US$15. What makes the Indian government think that smugglers won't easily switch to US$20 bills?

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By Rajendra Jadhav
Reuters
Thursday, November 10, 2016

MUMBAI -- India's surprise move to abolish high-value bank notes has started to disrupt cash-based gold smuggling and should benefit official importers of the metal in the world's second biggest consumer, industry officials said.

A drop in smuggling will allow banks and refiners to charge a premium over official local prices, which include a 10 percent import tax. For most of 2016 gold traded at a discount in India as smugglers undercut official importers.

Official importers welcomed Prime Minister Narendra Modi's move this week to declare 500- and 1,000-rupee bills illegal and make them worthless for holders of unaccounted wealth.

Dealers charged a premium of up to $6 an ounce over official domestic prices on Thursday, compared to a discount of $3 an ounce last week. ...

... For the remainder of the report:

http://in.reuters.com/article/india-gold-smuggling-noteban-idINKBN1351EP



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...For the remainder of the announcement:

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