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Reply #31


Response to Tansy_Gold (Original post)

Tue Aug 27, 2013, 08:51 AM

31. Capital Flight: Currencies Plunge Rapidly in Asian Economies

http://www.spiegel.de/international/world/currency-crisis-hits-developing-countries-in-asia-and-elsewhere-a-918714.html

Indian customs officials are out in full force these days in their attempt to stop the illegal import of gold. At the airport in Kochi, in the south of the country, officials recently caught a man who had hidden two kilograms (5.5 pounds) of precious metals in his socks -- he was given away by his odd gait. Other customs officers on the border with Nepal stopped a truck with 35 kilograms of gold hidden in its bumper.

Their battle is a frustrating one. For every kilogram of gold seized, it is estimated that another makes it into the country unnoticed. Gangs pay smugglers up to 50,000 Indian rupees (around Ä575 or $770) to bring them gold from, for example, Dubai, a favorite source. Indians are obsessed with gold right now -- and not only because of the approaching wedding season. As the rupee has dropped dramatically in value, many Indians have turned to tangible assets. The government has increased its tax on gold imports as a way of shoring up the country's currency, but that has only caused wary investors to flee further.

The government comes up with new ideas for slowing the rupee's fall almost every day: by imposing customs duties on flat-screen TVs -- which Indians could previously bring into the country unobstructed -- for example, or by making it more difficult for company managers to export capital and invest it abroad.

None of this has helped. Since May, the rupee has lost 17 percent of its value against the dollar.

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LineReply Capital Flight: Currencies Plunge Rapidly in Asian Economies
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