The Reserve Bank of India (RBI) purchased 6.8 tonnes of gold in September 2018, taking its total gold reserves to 579.9 tonnes, the World Gold Council said, citing data from the International Monetary Fund’s International Financial Statistics.
The central bank’s gold purchases came amid an intensifying trade war between China and the US, and increasing concern about volatility in the domestic currency market.
Despite the purchases, the share of gold in RBI’s reserves was unchanged on month at 5.5% in September. Gold is regarded as a safe haven asset, especially in times of turbulence in financial markets.
The RBI bought 21.8 tonnes of gold in Jan-Sep, with 13.7 tonnes being bought in the September quarter alone, the World Gold Council said in a report on Thursday. The council said the trend was aimed at enhancement of long-term stability of reserves amid rising concern about global economic and political turmoil.
The central bank started purchasing gold in December last year, after a gap of eight years.
In its annual report for 2017-18 (Jul-Jun) released in August, RBI said it continued to look for opportunities to diversify India’s foreign currency assets, and added that the “gold portfolio has also been activated”.
It had last added a sizeable quantum of gold to its reserves in 2009, when it bought 200 tonnes of the metal from the International Monetary Fund.
The central banks of Russia, Turkey, Kazakhstan and Mongolia have also increased the share of gold in their foreign exchange reserves in September 2018.