Central Government is mulling over the option to buy Gold from public for printing currency pledging Gold stokes. As Govt has announced huge package for the revival of different sectors, units, the shortage of currency may occur according to experts. In such situations Govt will have two options one of Foreign Currency Reserves and second one to pledge gold stokes buying that from public for printing Currency.
Report added that pledging gold reserves for imprinting currency would be a better option and by doing so Govt may refrain from devaluation & negative rating.
Banking procedure will be followed in buying gold reserves from Public, small and large scale Gold reserves, said an expert. As Govt has announced 20L Crores relief package to bounce back from Coronavirus pandemic, the shortage of currency notes would arise. Public will also move to banks in such situations when currency notes deplete in numbers. Mulling over the option economic experts have hinted that Central Govt may pledge gold reserves to print more currency notes to maintain flow of currency.
Option to re-open Jewelry shops is also considering so the public can sell gold reserves in need of currency. As several reservers plan to sell gold at maximum prices Govt is considering all possible options to keep balance by increasing currency imprinting at required rate. Govt shall likely buy Gold from Jewelry shops, the common public having reserves in exchange of currency. The process is likely to be done as per banking system.
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By opening jewelry shops the purchase of Gold ornaments would be easy from public, said an expert. Govt may open the jewelry shops soon as to convince public to sell the Gold reserves they possess. By pledging Gold and Foreign Currency Reserves, there shall be no devaluation in Currency and rating, report added.