The gold reserves of Reserve Bank of India (RBI) rose by 3.8 tonne to 765.1 tonne in May, the World Gold Council (WGC) said on Wednesday, citing data from the International Monetary Fund (IMF) showing International Financial Statistics.
The share of the precious metal gold in the central bank's total reserves was at 7.5 percent for May. For January-May, the Reserve Bank of India purchased 11.0 tonne gold. In 2021, the central bank's gold purchases stood at 77.5 tn, significantly higher than 41.7 tonne in 2020.
Notably, India has the tenth-largest official gold holdings in the world. Rising concern over global economic growth in recent months may have led the Reserve Bank of India to turn to gold as an alternative asset. The precious metal is considered a haven asset, especially in times of turbulence in global financial markets.
The central bank began buying gold in December 2017 after a gap of eight years. In its annual report for 2017-18 (July-June), the RBI said it continued to look for opportunities to diversify India's foreign currency assets. It also added that that the gold portfolio had also been activated. The Reserve bank added a sizeable quantum of gold to its reserves in 2009, when it bought 200 tn of gold from the International Monetary Fund.
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