The central regulatory bank of India, Reserve Bank of India, has added approximately 8 metric tonnes of gold to its forex reserves over the past one year. While RBI possessed 558 tonnes of gold around June 2017, it had approximately 566 tonnes of gold as of June 2018.
Unlike the central banks of other countries, RBI does not trade in gold often though the RBI Act permits the central bank to do so. The RBI has added the 8-tonne gold to its reserves after nearly 9 years. The last time it added gold was in November 2009 when it purchased 200 metric tonnes of gold from the International Monetary Fund (IMF). As per experts, the gold buy is a far-sighted treasury move during a time of rising yields.
Out of the 566 tonnes of gold held by RBI, approximately 274 tonnes will be kept aside as assets for the banking sector and the remaining 299 tonnes will be held as a reserve for the notes issued by the bank regulator.
Currently, the value of gold as an asset held by RBI is Rs.69,674 crore as against Rs.62,700 crore held last year. The gold reserves for the current year, however, is valued at Rs.1.42 lakh crore.
According to Business Line, the 566 tonnes held by RBI is an all-time-high whereas the all-time-low was in the second quarter of the year 2000 when the RBI held 358 tonnes of gold. The average of gold reserves held by India in the period from 2000 to 2018 is 452 tonnes.
Source: The Hindu Business Line