MUMBAI, May 5 (Reuters) – The Reserve Bank of India (RBI) revealed on Monday that the share of gold in India’s foreign exchange reserves has doubled over the past four years, as of March-end. The increase highlights a growing preference for gold as part of the nation’s financial strategy.
According to the RBI’s half-yearly forex reserves report, the gold share in total reserves rose to approximately 11.70% by the end of March, up from 9.32% at the end of September 2024 and 5.87% at the close of March 2021.
By the end of March, the RBI held 879.59 metric tonnes of gold, an increase from 854.73 metric tonnes at the end of September. Of this, 511.99 metric tonnes were held domestically, up slightly from 510.46 metric tonnes at the end of September, the RBI said.
The report also noted that 348.62 metric tonnes of gold were kept in safe custody with the Bank of England and the Bank for International Settlements (BIS), while 18.98 metric tonnes were held in the form of gold deposits.
Gold reserves are seen as a strategic asset by central banks, helping to diversify holdings, enhance financial stability, and mitigate risks from inflation and currency volatility. Amid ongoing global market uncertainties, central banks worldwide have been increasing their gold purchases.
The report also noted an uptick in the ratio of short-term debt to reserves, which rose from 19.1% at the end of September 2024 to 22% by December 2024. Additionally, the ratio of volatile capital flows to reserves increased to 74.3% by the end of December 2024, up from 67.8% in the prior quarter.
