Share of gold in the forex reserves rises to 7%

Reserve Bank of India‘s affinity to gold appears to be increasing. The share of gold in the total foreign exchange reserves rose to 7% at the end of March from about 5.88% six months prior to that, data published by the central bank showed.

At the end of March, RBI held 760.42 metric tonnes of gold (including gold deposits of 11.08 metric tonnes). While 453.52 metric tonnes of gold is held overseas with the Bank of England and the Bank of International Settlements (BIS), 295.82 metric tonnes of gold is held domestically, RBI said in its half-yearly report on management of forex reserves.

Total foreign exchange reserves were at $607.309 billion.

The report also said that India’s foreign exchange reserves were adequate to cover around 13 months of imports at the end of 2021 when reserves were at $633.6 billion.

The reserves fell to $597.7 billion as on April 29 this year, and therefore import coverage has depleted from the December level. The reserves hit an all-time high of $642.453 billion on September 3 last year which were enough to cover nearly 15 months of imports on a balance of payments basis.

The foreign currency assets comprise multi-currency assets that are held in multi-asset portfolios. As at end-March 2022, out of the total assets of $540.72 billion, $363.03 billion was invested in securities, $140.54 billion was deposited with other central banks and the Bank for International Settlements and the balance $37.16 billion comprised deposits with commercial banks overseas, the report showed.

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