The Reserve Bank of India purchased 52.3 tonnes of gold in FY19 to augment its foreign exchange reserves, according to the latest data released early this week by the World Gold Council. With this, it has entered league of world’s top-10 gold holding central banks.
RBI currently holds 612.6 tonnes of the metal as part of its foreign exchange reserves. Till about a month ago, the central bank was ranked 11th, but in March it added 3.7 tonnes of gold to its forex reserves and dislodged the Netherlands from the 10th spot.
The World Gold Council derives data on gold reserves from International Financial Statistics under International Monetary Fund. All signatory central banks have to provide monthly updates to the IMF on their gold purchases forming part of their foreign exchange reserves.
The latest data shows the RBI’s gold holding is 6.1 per cent of its overall foreign exchange reserves. India’s central bank started adding gold from over a year ago after staying put for eight years. Previously it had added gold in November 2009 when it bought 200 tonnes from IMF.
Not just RBI, many other global central banks, such as those in Russia, China and Turkey have started adding gold in a big way to their forex reserves. Alistair Hewitt, Director of Market Intelligence, World Gold Council says, “Initial data released by the IMF shows central bank gold demand remains in good health. Net purchases amounted to healthy 43 tonnes, (which is) eight per cent higher month-on-month. Reported net purchases for 2019 so far total 207 tonnes, the highest year-to-date total since central banks became net buyers in 2010.”