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Informist, Thursday, May 22, 2025

 

MUMBAI - The Reserve Bank of India has desisted from adding gold to its reserves since Mar. 28, and its stock of the yellow metal has remained steady at 879.58 tonne since then, according to the central bank's data showing details of its reserves as on Apr. 25.

 

The value of RBI's gold holding fell to $84.4 billion on Apr. 25 from $84.6 billion a week ago, as global prices of the metal fell towards the reporting date, the central bank said in its monthly bulletin for May.

 

A year ago, on May 3, 2024, the RBI had a reserve of 828.6 tonnes gold, indicating that it has added 50 tonnes of gold in last one year, the report released on Wednesday showed.   

 

According to the World Gold Council, in the first four months of 2025, the Reserve Bank of India added 3.4 tonnes of gold to its reserves, lower than the 24.1 tonnes purchased in the corresponding period last year.

 

Gold has emerged as a major component of RBI's foreign exchange reserves. As on May 9, it had $690.6 billion of reserves, of which gold accounted for 12.5%. More recently, gold has assumed even higher share of the reserves. On an incremental basis, in the last one year, its share in RBI's total foreign exchange reserves was a huge 65.4%, per the central bank's weekly data.

 

The valuation factor came in the play amid global uncertainties. "Gold prices remained elevated in April, bolstered by safe-haven demand amidst rising trade uncertainties, but the trend reversed in May as market concerns eased," the RBI said.

 

High gold prices seem to have pushed up inflationary pressure in the country. As the RBI noted in its monthly report for May, the sequential downturn in headline CPI inflation that started in November continued into April, for the sixth consecutive month. "However, core inflation (CPI excluding food and fuel inflation) movements continued to be disproportionately impacted by the highly elevated gold prices. Excluding its impact, underlying inflation pressures too remained muted," it said.

 

Core CPI inflation edged up to 4.2% in April from 4.1% in March, driven by an increase in gold prices by 6.2%, it said.  End

 

US$1 = INR 85.67

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Abhijit Doshi

Edited by Vandana Hingorani

 

 

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