RBI boosts gold share in forex reserves to 11.7% in March 2025, holding 879.59 tonnes, as global uncertainty drives central banks to accumulate safe-haven assets.
The Reserve Bank of India (RBI) has significantly increased the share of gold in its foreign exchange reserves, with the portion almost doubling from 5.87% in March 2021 to 11.70% in March 2025. This rise comes at a time when central banks across the globe are turning to gold as a safe-haven asset due to rising geopolitical risks, trade tensions, and global inflation.
According to RBI’s latest Half-Yearly Report on the Management of Foreign Exchange Reserves, published on May 5, the central bank held gold worth $77.793 billion as of March 2025. In terms of volume, India’s total gold holdings rose to 879.59 metric tonnes, up from 695.31 tonnes in 2021.
The report detailed that 511.99 tonnes of gold were held within India, while 348.62 tonnes were secured with the Bank of England and the Bank for International Settlements (BIS). An additional 18.98 tonnes were maintained as gold deposits.
Explaining this trend, Sachin Jain, Regional CEO for India at the World Gold Council, told ANI that a combination of global economic concerns led to the increase in gold holdings.
“There are many factors that have influenced gold buying, including de-dollarisation, trade sanctions, and inflation concerns, but most importantly the volatile geopolitical situation across the world,” said Jain.
He added that central banks have been net buyers of gold for the past 15 years, but buying has surged notably in the last three years. Over 1,000 tonnes of gold were bought annually since 2022, including 1,045 tonnes in 2024. In March 2025 alone, 17 tonnes were added globally by central banks, highlighting the asset’s growing strategic value.
Jain also emphasized that despite record-high gold prices, central banks continue to accumulate gold to strengthen their reserves. This behavior reflects increasing caution due to global fragmentation and economic instability.
“As global fragmentation continues, central bank buying will remain a strong pillar of demand and shape the market’s long-term dynamics,” he noted.
India’s recent gold buying trend has been mixed. The RBI added 57.5 tonnes over the past year, but its monthly gold purchases have slowed since late 2024. While the bank purchased an average of 6.6 tonnes per month from January to November 2024, there was a noticeable pause in December and February. Purchases in January and March 2025 were also lower than the earlier monthly average.
Jain suggested that the slowing pace might signal a more measured approach by the RBI. However, it underscores the rising importance of gold in India’s overall reserve management strategy.
Gold continues to be viewed as a reliable store of value during economic uncertainty. Its role as a hedge against inflation and financial market volatility makes it a critical part of many countries’ reserve portfolios.
With global tensions remaining high and the future of dollar dominance facing growing challenges, India’s strategic accumulation of gold is seen as a prudent step toward diversifying its foreign exchange reserves and securing economic stability.
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