The Finance Ministry today exuded confidence that currency and stock markets, which tumbled following the surgical strike, will stabilise in the next few days and decisive action against terrorism will spur growth.
The Finance Ministry today exuded confidence that currency and stock markets, which tumbled following the surgical strike, will stabilise in the next few days and decisive action against terrorism will spur growth. While the stock market barometer Sensex plummeted 465 points to close at 27,827, the rupee declined by 39 paisa to a dollar– its biggest single-day fall in three months.
“The markets including the currency markets, the stock market they will stabilise in a matter of a very very few days,” Economic Affairs Secretary Shaktikanta Das told reporters.
Earlier during the day, Finance Minister Arun Jaitley termed Indian army’s “surgical strikes” on terrorists preparing to infiltrate from Pakistan-occupied Kashmir as pre- emptive action.
Late last night India carried out ‘surgical strikes’ on terror launch pads across the Line of Control (LoC) in Jammu and Kashmir, inflicting “significant casualties” on terrorists and those who are trying to support them.
In a tweet earlier, Das had also said: “Terrorism (is the) biggest threat to our financial and economic stability and growth. Decisive action against terrorism will spur growth and stability”.
M Veerappa Moily, chairman of Parliamentary Standing Committee on Finance, said India’s surgical strikes across the LoC have not affected gold prices.
“India’s surgical strikes on Pakistan have not affected gold prices in India,” Moily was quoted as saying by an Assocham statement.
Addressing a gold summit, Moily said: “Need policies for promoting gold as investment… shall suggest appropriate policies to standing committee. The domestic savings (are) coming down drastically and gold can play an important role in the economy.”
Moily said gold has been considered a safe haven asset throughout history as it has been viewed as a store of value and means of exchange.
“It is essentially a currency that cannot be manipulated by the interest rate policies of the government and has traditionally been used as a hedge against inflation or a falling dollar,” he said.
The sentiment towards the yellow metal remains very high irrespective of the rise/fall in prices and this love for the commodity has made the nation heavily reliant on gold imports.
Petroleum crude accounts for about 34 per cent of the total inward shipments, followed by gold and silver (12 per cent of the total imports), machinery (10 per cent), electronic goods (7 per cent) and pearls, precious and semi-precious stones (5 per cent), Moily said.
India is one of the largest importers of gold in the world. The country accounts for nearly one-third of the total world demand for gold. At more than 20,000 tonnes, Indian households hold the largest stock of gold in the world, Moily said.