As of March 31, 2024, the Reserve Bank of India (RBI) holds a total of 822.10 metric tonnes of gold, an increase from 794.63 metric tonnes the previous year. The value of these gold reserves is approximately $52.67 billion, contributing to the total foreign exchange reserves which amount to $646.41 billion.
The RBI’s gold holdings are categorized as follows:
In the financial year 2023-24, the RBI added 27.47 tonnes of gold to its reserves. This steady accumulation reflects the RBI’s strategic decision to diversify its assets and increase its gold holdings.
The RBI has been purchasing gold for several years. Recently, there has been a notable rise in the accumulation of gold reserves, driven by factors such as reduced confidence in dollar assets and strategic diversification.
In May 2024, the RBI repatriated over 100 tonnes of gold from the UK to India. This significant move, reminiscent of actions taken in 1991, was driven by logistical considerations and the need for diversified storage.
The RBI has been increasing its gold reserves to diversify its asset base and reduce reliance on dollar assets. This trend is part of a broader strategy observed among central banks globally.
A decline in confidence in dollar assets among global central banks has led to a shift towards gold. US Treasury data indicates that the holdings of US Treasury bonds by non-US central banks dropped from 50.1% in January 2023 to 47.2% in January 2024.
Gold is regarded as a safe-haven asset, providing a hedge against inflation and currency fluctuations. By increasing its gold reserves, the RBI aims to bolster its financial stability and economic resilience.
To facilitate the repatriation of gold, the RBI received customs duty exemptions for importing gold into India, recognizing it as a sovereign asset. However, integrated GST on imports still applies.
The RBI’s total balance sheet increased by Rs 7.02 lakh crore (11.08%) from Rs 63.44 lakh crore as of March 31, 2023, to Rs 70.47 lakh crore as of March 31, 2024. This growth is attributed to rises in foreign investments, gold, and loans and advances.
The RBI’s management of its gold reserves involves strategic accumulation, diversified storage, and adaptation to global economic trends. By enhancing its gold holdings, the RBI aims to improve economic stability, hedge against currency risks, and align with global central banking practices.
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