RBI's gold reserves rise amid global uncertainty

Mumbai: Keeping in view the growing global financial uncertainty, the Reserve Bank of India has increased the gold reserves in its forex reserves. According to Reserve Bank statistics, the share of gold in the forex reserves of the country at the end of the financial year 2020 was 6 percent, which increased to 7.85 percent at the end of the last financial year. The Russia-Ukraine war situation has also been a reason for the rise in gold reserves. Since 1967, 2022 has seen the highest purchase of gold by central banks.

At the end of February of the current year, the Reserve Bank had a total of 790.20 tonnes of gold, which was eight percent of the global gold reserves. The value of reserve gold at the end of financial year 2020 was Rs 2.09 lakh crore, which increased to Rs 3.75 lakh crore ($45.48 billion) at the end of last financial year. At the end of March, the forex reserves of the country stood at 578.78 billion dollars.

After the Corona period, not only the RBI but also the central banks of other countries increased the purchase of gold. Keeping in view the increase in interest rate and high inflation, the strategy of increasing the gold reserve was adopted as a safe haven.

According to a recent report, in 2022, various central banks added 1,136 tons of gold to their gold reserves, which was estimated to be worth Rs 70 billion dollars.

Gold can play a major role as a liquid asset amid global financial uncertainty.

During a financial crisis, investments are made in low-risk assets like gold. Corona and the subsequent Russia-Ukraine war have increased inflation and interest rates, resulting in increased gold purchases. In financial year 2023, more than 15 percent return was released on gold investment.