RBI Foreign Exchange Reserves: Gold Holdings Rise 26% Since FY21

India’s gold reserves have seen a steady rise over the past 4 years, reflecting a strategic shift in the Reserve Bank of India’s approach to foreign exchange management. As per the latest data, the RBI’s gold holdings rose by 26% since FY21, reaching 879.58 metric tonnes as of March 31, 2025. This increase highlights gold’s growing role as a key component of India’s forex reserves, now accounting for 11.7% of the total, up from 5.87% in 2021.

RBI’s Gold Holdings Reach New High in FY25

India’s central bank has significantly ramped up its gold holdings over the past few years. As per the Reserve Bank of India (RBI), gold reserves stood at 879.58 metric tonnes as of March 31, 2025, marking a consistent year-on-year increase from 695.31 tonnes in 2021. This increase reflects the central bank’s continued strategy to diversify its foreign exchange reserves portfolio.

RBI Gold Reserves Over the Years (in Metric Tonnes)

Note: The data above is from RBI’s annual report.

Gold’s Share in Forex Reserves Doubles in Four Years

The share of gold in India’s total foreign exchange reserves has more than doubled in the last four 4 years. 

The RBI’s latest half-yearly report on forex reserves reveals that gold now constitutes 11.70% of total reserves, up from 5.87% at the end of March 2021 and 9.32% as of September 2024. This signals a strategic shift in India’s reserve management approach, prioritising stability and diversification.

Share of Gold in Total Forex Reserves (in %)

Note: As per the Reserve Bank of India Annual report, released in May, 2025.

Domestic vs. International Gold Holdings

Of the total gold held, the RBI reported that 511.99 metric tonnes were stored domestically as of March 31, 2025 slightly higher than the 510.46 tonnes reported at the end of September 2024. The remaining gold is held overseas:

• 348.62 metric tonnes are securely stored with the Bank of England and the Bank for International Settlements (BIS).
• 18.98 metric tonnes are in the form of gold deposits.

RBI Slows Gold Purchases in 2025; Focus Shifts to Domestic Storage

In the first four months of 2025, the Reserve Bank of India (RBI) significantly reduced its pace of gold acquisitions, adding just 3.4 tonnes compared to 24.1 tonnes during the same period last year. This marks a slowdown after a substantial 73-tonne addition in 2024. Despite the moderated buying, RBI’s gold reserves remain at a record high of 879.6 tonnes as of end-April 2025, unchanged from the previous month. Notably, there has been a shift in the composition of storage with 58% (around 512 tonnes) now held within India, up from 38% in March 2023.

The balance, about 349 tonnes, continues to be kept with international institutions like the Bank of England and the Bank for International Settlements. Since September, 1.52 tonnes have been added to domestic reserves, while international holdings increased by 25 tonnes.

Why Central Banks Value Gold?

Gold remains a key reserve asset for central banks globally, including India, due to its long-standing role as a store of value. It serves as a hedge against inflation, helps manage currency risk, and provides financial security during times of geopolitical or economic uncertainty. 

The RBI’s increased gold allocation underlines its intent to build a more resilient and diversified reserves base.

Read More: RBI Cut Repo Rate by 0.50%: Eases Policy Stance to Neutral from Accommodative.

Conclusion

The steady rise in RBI’s gold reserves over the past 4 years underscores a clear strategic intent: to strengthen India’s foreign exchange reserves through diversification and risk mitigation. With gold now comprising nearly 12% of the total reserves, the central bank appears to be positioning itself against global economic uncertainties and currency volatility. 

As gold continues to serve as a time-tested safe-haven asset, this accumulation trend reflects the RBI’s cautious yet forward-looking approach to securing India’s financial stability.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.