
In the fiscal year 2023-24, the Reserve Bank of India (RBI) increased its gold reserves by 27.47 tonnes, bringing the total stock to 822.10 tonnes, up from 794.63 tonnes the previous year. The RBI holds 309.03 tonnes of gold as backing for the notes issued in India. In addition, it has gold held as assets of the banking department, including gold held abroad, totaling 514.07 tonnes.
The RBI manages its gold holdings by regularly reviewing and assessing where to store it. As part of this process, the RBI recently brought back a little over 100 tonnes of gold from the UK, marking the first time such a significant amount of gold was added to the central bank’s treasury since 1991. The RBI may add a similar quantity of gold to its stock in the coming months for logistical reasons and diversified storage.
The increase in the RBI’s gold reserves is consistent with a global trend among central banks to reduce their reliance on dollar assets. The decline in confidence in dollar assets among central banks, as evident in the decrease in non-US central banks’ holdings of US Treasury bonds, has played a role in the RBI’s decision to increase its gold reserves.
According to the RBI’s annual report for FY24, the central bank’s total gold reserves stood at 822.10 tonnes, an increase of 27.47 tonnes from the previous year. These reserves were valued at $52.67 billion in the total foreign exchange reserves, which amounted to $646.41 billion. The RBI’s balance sheet also saw an increase of Rs 7.02 lakh crore, primarily due to the rise in foreign investments, gold holdings, and loans and advances.
It is worth noting that the RBI received a customs duty exemption to bring the gold into the country, with the government forgoing revenue on what is considered a sovereign asset. However, integrated GST, levied on imports, was not exempted.
ICICI Direct, in a report from April 2024, highlighted that the RBI has been steadily increasing its gold reserves for a few years, with a significant rise observed in the last few quarters. This trend is attributed to central banks’ diminishing confidence in dollar assets.