Why RBI buys 57.5 tonnes of gold in a year? Here's everything you need to know

The Reserve Bank of India (RBI) has purchased 57.5 tonnes of gold till now during the financial year 2024-25, taking the country's overall gold reserves to 879.6 tonnes. It is regarded as the second largest annual purchase over the past seven years.  Along with the people, now the Reserve Bank too is adding to its gold reserves. The RBI's motive behind this is that it wishes to diversify its foreign exchange reserves, shield it from risks.

Why is RBI purchasing gold again and again?

This acquisition of RBI has been done with the global economic uncertainty and the state of the dollar in mind. India is also moving in that direction so that its reserves can be diversified and balanced. As per the Economic Times report, the Reserve Bank of India (RBI) had purchased the most ever gold in FY 2021-22, when 66 tonnes of gold were added to the reserves. . Gold purchases have also picked up pace in the financial year 2024-25.

When did you acquire gold?

The major reasons for the trend are supposed to be the rising uncertainty all over the world and dollar volatility. Since the re-election of Donald Trump as the President of the US in November 2024, the dollar has become persistently volatile, which once again boosted investors' trend towards gold, now being a safer option. Such an RBI approach is thought to be significant for diversifying foreign exchange reserves in India and also to shield them from global risk.

Where is India's gold stored?

Most of the nation's gold reserves are stored in England and other international banks. During the first quarter of 2024, India has been one of the leading nations that purchased the most gold. The action comes while there has been a sudden spike in gold prices on the international market.

How will it function in trouble?

Experts are confident that this RBI policy will not only bring more economic stability but also minimize the risk of international transactions and foreign indebtedness. Besides this, it is also seen to be a significant strategic move towards making the Indian rupee stronger internationally. Generally, this kind of huge gold acquisition by the RBI is seen as a part of India's long-term economic policy, which helps in securing the economy of the country against foreign financial turmoil and ensuring the balance of foreign exchange reserves.