Rbi Buys More Gold In 4 Months Than 2023, Here’s What It Signifies
Mon May 27 2024
Gold is one of the most precious metals in the world and serves as a hedge against financial constraints, or even during a tense geopolitical situation for both institutions and government bodies.
The Reserve Bank of India, this year so far has significantly increased its gold reserves amid the recent geopolitical tensions.
According to reports, the RBI has bought around 24 tonnes of gold in the last four months, higher than the quantity of the yellow metal it accumulated in 2023.
The central bank has added 24 tonnes of gold as a part of its foreign exchange reserves between January and April, this year. Reportedly, it was done as a precaution amid the rising geopolitical tensions. For comparison, in 2023 the bank bought around 16 tonnes of the precious metal, throughout the year.
An Economic Times report suggested that by April 26, 2024, the RBI had 827.69 tonnes of gold in its foreign exchange reserves. It showed an increase from a reported 803.6 tonnes, in December last year. The gold reserve showed an increase of almost 1.5 times the volume added in the entire 2023.
Even though gold is an extremely common commodity found in Indian households, the bank has remained less active in its accumulation. In 1991, it received flak for its decision to pledge a portion of gold reserves during the crisis of foreign exchange.
RBI only started adding gold to its stock in December 2017, through market purchases. In 2022, the bank regulator took a more aggressive approach and this January resurgence was reported in buying gold.
As per reports, the gold share in the foreign exchange reserve grew from 7.75 per cent in December 2023 to approximately 8.7 per cent by April 2024. The bank is not only profiting from its high volume but also from its gain in value because of the recent gold price hike.
Source: https://www.news18.com/