Author: Paul Ploumis16 Jan 2015 Last updated at 06:55:13 GMT

NEW DELHI (Scrap Monster): The gold imports by India declined sharply during the month of December last year. The drop in gold imports together with plunging crude oil prices have cut India’s trade deficit to multi-month lows during the month.

As per data, gold imports during Dec ’14 amounted to $1.34 billion, which is even less than one-fourth of the $5.61 billion worth imports recorded during Nov ’14. The gold imports by the country have been in an uptrend since August last year. However, the sharp 76% month-on-month drop in gold imports has done well to check the trade deficit. The lackluster demand for the yellow metal due to volatility in prices and stocking of adequate quantities ahead of wedding season has resulted in low gold imports during Dec ’14. On the other hand, gold imports during Dec ’14 were higher by 7.4% when matched with the imports of $1.25 billion during Dec ’13.

Much to the relief of India’s Current Account Deficit, the cut in gold imports and crude prices helped to trim the trade deficit to its lowest level since Feb ’14. The deficit fell to $9.43 million, almost 44% down when matched with the previous month. The oil import bill during Dec ’14 has declined by nearly 15% over the previous month.

However, the trade data indicates that the merchandise exports by the country fell marginally from nearly $26 billion in the prior month to $25.4 billion in Dec ’14.

The narrowing trade deficit figures give room for the Reserve Bank of India (RBI) to come up with more monetary easing measures in near future. The RBI had announced quarter-point cut in rates recently.