....Currency debasement has been an unwritten policy goal of the Reserve Bank of India and the government and citizens understand that very well. So when Rangarajan says a “certain amount of gold demand is built into the Indian psyche”, the culprit for the same is the RBI. Of course, Rangarajan did mention inflation hedge as one of the reasons why people buy gold. But in the same breath he also mentioned that Indians purchased $66 billion worth of gold last year and this was $20 billion more than in the previous year. That is a wrong way to look at gold – if you accept that gold is an inflation hedge, then one ought to compare quantities imported rather than the dollar value of the same.........
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