Chennai: RBI has bought 8.7 tonnes of gold in the March quarter, increasing the metal's share in its reserves to 6.4 per cent.
As per the Gold Demands Trend data from World Gold Council at the end of December 2018, the metal held by Reserve Bank of India as reserves stood at 600.4 tonnes. IMF's central bank gold holding data released by WGC, finds that Indian gold reserves have gone up to 608.7 tonnes by the end of February. This is an incremental increase of 8.3 tonnes from December.
After buying 200 tonnes of gold from IMF in 2009, RBI had shelved its gold accumulating initiatives for some time. The share of gold in RBI's reserves stood at 6.9 per cent at that time. When the gold prices rose, it went up to 10.6 per cent in 2012. However, owing to steep fall in gold prices and growth in overall reserves, the share had shrunk to 5.4 per cent in the subsequent years.
Since December 2017, the central bank has started making staggered purchases of small quantities of gold from the open market.
As on June 30, 2018, the Bank held 566.23 metric tonnes of gold as compared to 557.77 metric tonnes as on June 30, 2017, an increase of 8.46 metric tonnes. However, since June 30, the quantum had gone up by close to 34 tonnes by the end of the calendar year. In its Annual Report of 2017-2018, RBI said: "diversification of India's Foreign Currency Assets (FCA) continued during the year with attention being ascribed to risk management, including cyber security risk. The gold portfolio has also been activated".
RBI's gold accumulation is part of the strategy adopted to diversify its reserves. Most of the central banks, especially those of the emerging economies like China and Russia have been increasing the gold share as part of their efforts to de-dollarise their reserves. Central banks have been net buyers for more than five years and net purchases by different central banks in 2018 touched the highest level since fiat currencies came into being in 1970s.
