RBI's Strategic Gold Accumulation

In a notable shift during the second half of FY25, the Reserve Bank of India (RBI) bolstered its gold reserves by 25 tonnes, marking a 3% increase. This move comes even as the country's foreign exchange reserves saw a decrease from $705.8 billion to $668.3 billion.

Value and Share of Gold Reserves Rise

The accumulation of bullion was not just in quantity but also in value, with gold holdings surging by 18.9% to $78.2 billion. This increase reflects the rising international gold prices, elevating gold's share in forex reserves from 9.3% to 11.7%.

Historical Context and Storage

FY25 witnessed RBI purchasing 57.5 tonnes of gold, the second-highest addition in its history. Of the total 879.59 metric tonnes, 512 metric tonnes are stored domestically, while 348.6 metric tonnes are held in safe custody by the Bank of England and the Bank for International Settlements, and 19 metric tonnes as gold deposits.

Impact on Forex Reserves

The cover for imports provided by foreign exchange reserves decreased from 11.8 months to 10.5 months, as RBI utilized some of its foreign currency assets to stabilize the rupee.