RBI's Gold Reserves Strategy

The Reserve Bank of India (RBI) has significantly slowed its process of bringing gold reserves back to India, with only 1.53 tonnes transferred in the latter half of the financial year ending March 2025. This marks a stark contrast to the 102.15 tonnes repatriated in the previous six months.

Gold as a Safe Haven

Central banks globally, including the RBI, view gold as a critical asset to diversify foreign exchange holdings and hedge against inflation and currency fluctuations. The trend of increasing gold acquisitions has been particularly pronounced in times of global uncertainty, such as the Russia-Ukraine conflict and the aftermath of the Covid pandemic.

Current Gold Holdings

By March 2025, the RBI's total gold reserves stood at 879.59 metric tonnes, with 511.99 tonnes stored domestically and 348.62 tonnes held overseas, primarily with the Bank of England and the Bank for International Settlements (BIS). An additional 18.98 tonnes were maintained as gold deposits.

Increasing Proportion in Forex Reserves

The share of gold in India's total foreign exchange reserves rose from 9.32% in September 2024 to approximately 11.70% by March 2025, reflecting its growing importance in the RBI's reserve management strategy.

Foreign Currency Assets

Aside from gold, the RBI's foreign exchange reserves include significant holdings in foreign currency assets, totaling $567.56 billion by March 2025. These assets are diversified across securities, deposits with other central banks and the BIS, and overseas commercial banks, with a portion managed by external asset managers for further diversification.