The Reserve Bank of India’s gold reserves is up more than 40 percent since it resumed purchase of the yellow metal over five years ago, even as it seldom sells unlike other central banks. IT implies that gold has emerged as a strong hedge against inflation and also helped reduce dollar dependence to an extent.
India’s official gold reserves is up from 17.9 million troy ounce in December 2017 to 25.55 million troy ounce in April this year according to the latest RBI data. This roughly translates to 795 metric tonnes of gold.
India’s gold reserves have surged by over 40% since the country resumed purchasing the precious metal over five years ago. The RBI’s continuous purchase underscores gold’s prominence in international reserve portfolios amid market volatility and heightened risk. The rising share of gold in reserves is likely part of RBI’s diversification strategy to reduce risk from geopolitical risks and the COVID-19 pandemic.
