RBI goes slow in bringing back home gold from overseas vaults

The central bank brought back home only 1.53 tonnes of gold it held overseas between end September 2024 and end March 2025, compared with 102.15 tonnes it brought back in the first half of the last fiscal, showed the latest RBI data published Monday.

The RBI had begun bringing back home its gold assets over the past few years, particularly after the war broke out between Russia and Ukraine in February 2022.

The RBI report said that as of end-March 2025, the central bank held 879.59 metric tonnes of gold, of which 511.99 metric tonnes were held domestically. While 348.62 metric tonnes of gold were kept in safe custody with the Bank of England and the Bank for International Settlements (BIS), 18.98 metric tonnes were held in the form of gold deposits.

In value terms, the share of gold in India’s total foreign exchange reserves increased from 9.32 percent as at end-September 2024 to about 11.70 per cent as at end-March 2025.

Central banks buy gold to diversify their forex assets and also because bullion acts as a hedge against inflation and currency fluctuations. It is considered a safe haven asset through global uncertainties and political turmoil.

Central banks the world over have stepped up gold purchases since the geopolitical risks and cross-border tensions escalated post-Covid.

The other component of reserves - foreign currency assets - comprise multi-currency assets.

As of end-March 2025, out of the total foreign currency assets of $567.56 billion, $485.53 billion was invested in securities, $ 45.68 billion was deposited with other central banks and the BIS and the balance $36.34 billion comprised deposits with commercial banks overseas. To diversify the portfolio, a small portion of the reserves is being managed by external asset managers.