The Reserve Bank of India (RBI) has expanded its gold reserves by $5.6 billion between April and June, amid global economic uncertainties. This increase, revealed in RBI data, shows the central bank acquiring around nine tonnes of gold from the end of March to May.
Per a report by Indian Jeweller, during this period, the price of gold per tonne rose from $63.44 million to $68 million due to strong global demand.
This acquisition significantly boosted the RBI’s overall reserves, with the value of gold reserves alone increasing by $3.8 billion. As of June 28, India’s total foreign currency reserves reached $652 billion.
Per the report, RBI Governor Shaktikanta Das emphasized the central bank’s strategic approach during a media briefing on April 5. He stated that the RBI’s decisions on gold accumulation are based on thorough assessments aimed at diversifying foreign currency assets and mitigating inflation and foreign exchange risks.
The report noted that this move aligns with global trends of increased gold acquisitions by central banks since the Russia-Ukraine conflict began in early 2022. Central banks worldwide, including India’s, view gold as a secure asset amidst geopolitical uncertainties.
Additionally, the RBI has been repatriating physical gold acquired overseas back to India, possibly as a precautionary measure against rising global tensions.
According to the report, the World Gold Council highlighted central banks’ ongoing commitment to gold as a strategic asset in a recent report, noting that this trend persists despite market volatility.
The report stated that the RBI’s strategy of bolstering gold reserves began in December 2017 but has accelerated in recent years, particularly following the COVID-19 pandemic. This reflects a cautious approach to reserve management in the face of global economic changes.
