RBI Gold Reserve
The Reserve Bank of India has purchased as many as 24 tonnes of gold in the four months from January to April this year. It has increased by 1.5 times compared to gold reserves in the whole of 2023. In the year 2023, 16 tonnes of gold was purchased. RBI held 827.69 tonnes of gold as part of foreign exchange reserves as on 26 April 2024. It was 803.6 tonnes by the end of December last year, according to the latest data released by the Reserve Bank.
#FPBusiness: The Reserve Bank of India (RBI) has added as many as 24 tonnes of gold to its stock of reserves in just four months from January to April this year.
Know why is RBI stocking up gold?https://t.co/NMrG4xp8CD
— Firstpost (@firstpost) May 23, 2024
Rising global uncertainty has led central banks in emerging markets to buy gold. These central banks are signaling the need for policy diversification in challenging times due to geopolitical developments and a slowing global economy.
Like these central banks, the Reserve Bank is also diversifying reserves as a strategic diversification strategy to hedge against currency volatility. Gold purchase has also been emphasized as an important factor in this, said the Reserve Bank in its latest monthly report published recently.
The share of gold in the total foreign exchange reserves was 7.75 percent at the end of December 2023, which has increased to about 8.7 percent at the end of April 2024. The Reserve Bank has also said that along with the increase in gold reserves, the Reserve Bank is also benefiting from the increase in the price of gold.
Special emphasis on buying gold
Although India is known as the world’s largest consumer of gold, the Reserve Bank has so far not been very active in hoarding gold. In 1991, the Reserve Bank faced severe criticism when it pledged part of its gold reserves during the foreign exchange crisis.
After that all the gold came back to the bank coffers and from 2017 RBI started stocking gold by buying it from the market. The Reserve Bank bought large amounts of gold from the market in 2022. However, it decreased in 2023. After that, from January 2024, the Reserve Bank again emphasized on increasing the reserves by actively buying gold from the market.
Gold buying countries (in tonnes) during the quarter January to March 2024
• Turkey – 30.12
• China – 27.06
• Kazakhstan- 16
• Oman-4
• Kyrgyzstan -2
• Singapore- 2
(Source – World Gold Council)
Countries with the largest gold reserves
• America – 8133 tons
• Germany – 3366
• Italy- 2451
• France – 2436
• Russia – 2271 tons
(Source – World Gold Council) (India ranks ninth in terms of gold reserves.)
Salient Features
• Addition of 24 tonnes – in four months from January to April 2024
• 827.69 Tons of Gold – Current Gold Reserves (Part of Foreign Exchange Reserves)
• 1.5 times increase – compared to gold in 2023
• 803.6 tonnes of stock – up to the end of December 2023
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