The Reserve Bank of India (RBI) announced that the value of India’s gold reserves crossed USD 100 billion for the first time, reaching USD 102.36 billion in the week ending October 10, 2025.
India’s Gold Reserve Overview (2025)
- Total Gold Holdings: Around 879.6 metric tonnes as of March 2025.
- Historic Valuation: Gold reserves valued at USD 102.36 billion, marking an all-time high.
- Share in Forex Reserves: Gold now forms 14.7% of India’s total foreign exchange reserves, the highest since 1996–97.
- Annual Increase: Gold’s share rose from 12.5% (early 2025) due to valuation gains and market volatility.
- Repatriation: The RBI brought back over 100 tonnes of gold from overseas vaults to India during FY 2024–25.
Storage and Distribution
- Domestic Holdings: Around 200 tonnes stored in India.
- Foreign Holdings: Nearly 367 tonnes remain abroad for trade convenience.
- Institutions: Gold stored with the Bank of England, Bank for International Settlements (BIS), and the Federal Reserve Bank of New York.
Why Does RBI Store Gold Overseas?
- Ease of Transactions: Facilitates quick trading and gold swaps.
- Risk Diversification: Reduces geopolitical and operational risks by spreading storage globally.
- Historical Context: During the 1991 balance of payments crisis, India pledged gold to the Bank of England; later repaid, but some reserves continued to be held abroad for convenience.
- Security Concerns: Recent global asset freezes (e.g., Russia) prompted the RBI to shift part of its gold back home.
Importance of Gold Reserves
- Economic Stability: Acts as a hedge against currency devaluation and inflation.
- Financial Security Buffer: Provides protection during global financial shocks.
- Supports Monetary Policy: Helps maintain confidence in the rupee and manage domestic gold prices.
- Strategic Asset: Ensures diversification away from volatile foreign currencies.
Conclusion
Crossing the $100 billion mark reflects India’s growing financial strength and prudent reserve management. The RBI’s strategy of diversifying into gold enhances the country’s economic resilience and global credibility.
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