The Reserve Bank of India’s gold reserves have risen by over 40% since it resumed the purchase of the yellow metal over five years ago. This shows gold has emerged as a strong hedge against inflation and also helped reduce dependence on the dollar to an extent. India’s central bank, unlike others, never sells its gold.
India's official gold reserves is up from 17.9 million troy ounce in December 2017 to 25.55 million troy ounce in April this year according to the latest RBI data. This roughly translates to 795 metric tonnes of gold.
Central banks alone have bought 228 tonnes during January-April according to the latest World Gold Council report. " Sustained and significant purchases from the official sector underscore gold’s role in international reserve portfolios during times of market volatility and heightened risk" it said.
"The rising share of gold in reserves is likely part of RBI’s diversification strategy, to reduce the risk to reserves from shocks such as geopolitical risks and Covid-19 " said Gaura Sengupta, India economist at IDFC First Bank." As a result, the share of gold in India’s FX reserves has risen to 8% (in value terms) from 5% in 2017
Read more at: https://economictimes.indiatimes.com/news/economy/finance/rbis-gold-reserve-up-over-40-in-five-years/articleshow/100825558.cms