It is not just India, but a host of other nations that are bulking up on gold.
Russia, Egypt, Argentina, Poland, and Libya are the top five countries that saw the fastest jump in gold as part of their total foreign exchange reserves between 2009 and 2024. The share of gold reserves in the foreign exchange kitty for these five nations jumped between 800 and 2,700 basis points. One basis point is 0.01 percentage point.
The share of the yellow metal in India's forex reserves rose to 11.4% from 6.9%, a jump of 450 bps, data from the World Gold Council analysed by Bank of Baroda economists showed.
Total gold held by central banks globally has increased to 32,000 tonnes from 26,000 tonnes in the 15 years ending 2024, registering a compounded annual growth rate of 4.1%.
The ratios must be interpreted with care, as any increase could also be due to the quantum of forex reserves coming down rather than a rise in the gold stock.
Central banks buy gold to diversify their forex assets and as a hedge against inflation and currency fluctuations. It is considered a safe-haven asset during global uncertainties and political turmoil, experts said. Such purchases increased post-Covid amid rising geopolitical risks and cross-border tensions.
The Bank of Baroda report showed that the top 10 holders of gold are the United States, Germany, Italy, France, Switzerland, Japan, Netherlands, China, Russia, and India. Together, they held around 76% of the total gold by all central banks in 2024. However, this number is lower than 81% for 2009 because most developed nations have not seen material changes in their gold reserves.
For instance, the US has the highest gold reserves of 8,133 tonnes, but this has not changed in the past 15 years. Similarly, bullion holdings haven't changed much for France, Italy, Switzerland, the UK, and the Netherlands during this period, the report said.
India has been regularly building up gold reserves since 2017, while the build-up was continuous since 2014 in the case of China, the report added.
Russia, Egypt, Argentina, Poland, and Libya are the top five countries that saw the fastest jump in gold as part of their total foreign exchange reserves between 2009 and 2024. The share of gold reserves in the foreign exchange kitty for these five nations jumped between 800 and 2,700 basis points. One basis point is 0.01 percentage point.
The share of the yellow metal in India's forex reserves rose to 11.4% from 6.9%, a jump of 450 bps, data from the World Gold Council analysed by Bank of Baroda economists showed.
Total gold held by central banks globally has increased to 32,000 tonnes from 26,000 tonnes in the 15 years ending 2024, registering a compounded annual growth rate of 4.1%.
The ratios must be interpreted with care, as any increase could also be due to the quantum of forex reserves coming down rather than a rise in the gold stock.
Central banks buy gold to diversify their forex assets and as a hedge against inflation and currency fluctuations. It is considered a safe-haven asset during global uncertainties and political turmoil, experts said. Such purchases increased post-Covid amid rising geopolitical risks and cross-border tensions.
The Bank of Baroda report showed that the top 10 holders of gold are the United States, Germany, Italy, France, Switzerland, Japan, Netherlands, China, Russia, and India. Together, they held around 76% of the total gold by all central banks in 2024. However, this number is lower than 81% for 2009 because most developed nations have not seen material changes in their gold reserves.
For instance, the US has the highest gold reserves of 8,133 tonnes, but this has not changed in the past 15 years. Similarly, bullion holdings haven't changed much for France, Italy, Switzerland, the UK, and the Netherlands during this period, the report said.
India has been regularly building up gold reserves since 2017, while the build-up was continuous since 2014 in the case of China, the report added.
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