Gold Reserves by Indian Central Bank Hit Fresh Highs

SEATTLE (Scrap Monster): The gold holdings by the Reserve Bank of India (RBI) - the country’s central bank, has neared levels of 800 tonnes. The RBI has been adding to its gold reserves for the past several months.

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The RBI initiated purchases of gold to its portfolio since 2018. Prior to this, the bank had bought approximately 200 tonnes of gold in 2009, during the time of global financial crisis. Since 2018, it has added around 242 tonnes of gold. During the initial eight-month period in 2023, the RBI gold purchases has totalled 12.2 tonnes.

Over the past 4-5 years, central banks across the globe have been adding gold to their reserves at a rapid pace, as part of efforts to hedge their foreign currency risks. The Indian central bank too has been following suite. In the month of August alone, global central banks have added nearly 77 tonnes of gold.

According to data compiled by the World Gold Council (WGC), gold’s share in the country’s foreign exchange reserves stood at 8.3%. Looking at the trend over the past few years, the central bank buying is expected to remain strong in the final quarter of the calendar year as well, it said.

The RBI gold purchases are likely to remain robust as redemptions of first tranche of sovereign gold bonds (SGBs) are due this November and every year following it.