he Reserve Bank of India has made gold imports for domestic consumption tougher and forced exporters to bring home their dollar earnings quicker in yet another attempt to shore up the currency that's hurtling toward the Rs 60 mark to the US dollar again. 

If any importer of gold fails to export 20% of the gold from the arrived consignment, he would be barred from importing any more gold. This could reduce imports, as only a very small portion of gold is exported now. The central bank's move is also aimed at promoting export of gold and to prevent charges that its measures to improve the fortunes of the rupee are hurting jobs in the gems and jewellery industry that employs more than 30 lakh people. "The government's intention is to encourage exports of jewellery as well as lower import of gold," said Vipul Shah, chairman of The Gem & Jewellery Export Promotion Council. "The 20% export condition will lower import to some extent but may pull up exports." 

Exporters who benefit from the rupee depreciation have been ordered to bring in their US dollar earnings within nine months of shipping or executing orders, instead of 12 months. This could accelerate fund flows and push up the rupee. The rupee fell 0.6% to Rs 59.72 on Monday. Its life low was on July 8 at Rs 61.21 to the US dollar. For the second time in less than 10 days, the RBI has brought in measures to curb the rupee's depreciation. The government and the central bank have been targeting gold imports to reduce the current account deficit, the excess of spending overseas than earning, which is blamed for the rupee's fall. 

Gold, which accounts for more than half of the deficit, has been at the receiving end of the regulators, with the finance minister P Chidambaram raising import duties to 8% from just about 2% last year. Furthermore, RBI had made bank funding tough by insisting on near cash payments for any gold import for local needs. Of the 970 tonnes of gold imported last year, only 70 tonnes were exported. Now, the industry has to follow the 80:20 ratio. The government wants to bring down gold import to 500 tonne and raise exports to 100 tonne. 

Jewellery exports dropped drastically since the RBI directed importers to make upfront payment against letters of credit opened to source gold from overseas sellers or bullion banks that lend gold. "This is a move towards quantitative restrictions," said Samiran Chakraborty, head of research at Standard Chartered Bank. (Economic Times)