Amid escalating geopolitical tensions and rising gold prices, the Reserve Bank of India (RBI) has reported a significant uptick in its gold reserves, totaling 854.73 metric tonnes as of 30 September.
Of this amount, 510.46 metric tonnes are held domestically, marking a robust increase from 408 metric tonnes at the end of March 2024.
This surge of over 102 metric tonnes in domestic gold holdings during the April to September period aligns with a broader strategy to bolster the nation’s foreign exchange reserves.
The RBI’s ‘Half Yearly Report on Management of Foreign Exchange Reserves: April-September 2024’ noted that it securely stores an additional 324.01 metric tonnes of gold with the Bank of England and the Bank for International Settlements (BIS), along with 20.26 metric tonnes held as gold deposits.
The value of gold as a percentage of total foreign exchange reserves has also risen, increasing from 8.15% at the end of March to approximately 9.32% by the end of September.
This reflects a strengthening of India’s financial safety net during a period marked by economic uncertainty.
In terms of total foreign reserves, the RBI reported a growth from $646.42 billion in March to $705.78 billion in September 2024.
However, the balance of payments shows that foreign exchange reserves increased by $5.6 billion from April to June 2024, a decline compared to the $16.6 billion rise during the same period the previous year.
The RBI’s report also highlighted the net forward asset position, which stood at $14.58 billion as of September’s end.
External Assets Rise By $108.4 Billion; Improving Net IIP
Between June 2023 and June 2024, external assets grew by $108.4 billion while external liabilities rose by $97.7 billion.
Consequently, the net International Investment Position (IIP) showed improvement, moving from a negative $379.0 billion in June 2023 to a negative $368.3 billion in June 2024.
The report emphasizes the diversification of foreign currency assets (FCAs), which adhere to global best practices.
As of the end of September 2024, total FCAs amounted to $617.07 billion, with $515.30 billion invested in various securities, $60.11 billion deposited with other central banks and the BIS, and the remaining $41.66 billion in deposits with overseas commercial banks.
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