The Reserve Bank of India brought home only 1.53 tonnes of gold in the second half of the financial year ending March 2025. According to recent RBI data released on Monday, the central bank got home only 1.53 tonnes of its overseas gold holdings between September 2024 and March 2025, a significant decrease from the 102.15 tonnes brought back during the previous six months of the fiscal year.
Central banks acquire gold as a strategy to diversify their foreign exchange holdings and utilise it as protection against inflation and currency value changes. During periods of global uncertainty and political instability, gold remains a reliable investment option.
The move to get back gold to India had gained momentum following the outbreak of the Russia-Ukraine conflict in February 2022.
The RBI’s latest report indicates that by March 2025, its total gold holdings stood at 879.59 metric tonnes. Of this, 511.99 metric tonnes were stored within India, whilst 348.62 metric tonnes remained in the custody of the Bank of England and the Bank for International Settlements (BIS). Additionally, 18.98 metric tonnes were maintained as gold deposits.
The proportion of gold in India’s total foreign exchange reserves showed an increase, rising from 9.32 percent at the end of September 2024 to approximately 11.70 per cent by March 2025.
In response to increased geopolitical risks and international tensions following the Covid pandemic, central banks globally have increased their gold acquisitions.
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The additional component of reserves, foreign currency assets, consists of holdings in multiple currencies.
At the end of March 2025, from total foreign currency assets of $567.56 billion, $485.53 billion was placed in securities, $45.68 billion was held with other central banks and the BIS, whilst $36.34 billion was placed as deposits with overseas commercial banks. External asset managers handle a small proportion of the reserves to ensure portfolio diversification.
