-
RBI adds 72 tonnes gold in 2024 amid volatility
Wed Feb 05 2025
The Reserve Bank of India (RBI) added 72.6 tonnes to its stock of gold in 2024, quadrupling the incremental additions from a year ago, as it ranked just behind the Polish and Turkish central banks in net buying bullion through the year that witnessed massive currency volatility after Donald Trump’s election in November.
The RBI’s latest stock of gold amounted to 876.18 tonnes as of end December 2024 valued at $66.2 billion, up from 803.58 tonnes valued at $48.3 billion in the same period a year ago, implying a purchase of 72.6 tonnes in the calendar year. Incremental additions totaled 18 tonnes in 2023.
The 2024 gold purchase is the highest since 2021 and the second highest in any calendar year since it started buying gold in 2017. Significantly, the RBI, unlike many other global central banks like its Turkish, Swiss or even Chinese counterparts, seldom sells gold as it is a politically difficult decision. The Reserve Bank of India figures among the top ten holders of gold in its foreign exchange reserves.
Yet, the central bank has been aggressively buying gold. Gold purchases help the central bank protect itself against currency volatility and the consequent revaluation of reserves. For example, during April-September
2024. $56 billion was added to the forex reserves on account of valuation gains, but a loss of $17.7 billion in the same period a year ago.
Gold prices on the other hand rose over 25 percent during the year, helping in an equivalent amount of valuation gain on the central bank’s outstanding stock of gold even if the central bank does not book any trading profits on gold.Source: https://economictimes.indiatimes.com/