Craze for gold in Indians have led to a surge in import of gold in recent years and put pressure on balance of payments and external value of rupee. In view of this, examine the merits of Gold Monetization Scheme.
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The recent decline of the Indian rupee to 96.13 against the U.S. dollar highlights persistent external sector vulnerabilities driven by a potent combination of firm global crude oil prices, rising U.S. nominal and real bond yields, and sustained portfolio capital outflows from emerging markets. This depreciation episode underscores the complex macroeconomic challenges India faces in balancing imported inflation pressures, foreign exchange reserve management, and monetary policy autonomy in an interconnected global financial architecture.