Context: RBI Debunks Reports on Gold Sale, Says Reserves Steady at 880.52 Tonnes
RBI clarified that it has not sold any gold reserves and that India’s gold holdings remain unchanged at 880.52 tonnes, dismissing reports that gold was being used to support the rupee amid global uncertainty.
Foreign Exchange Reserves
What are Forex Reserves?
- Foreign assets held by the RBI to meet external payment obligations, stabilise the rupee, and provide a buffer during economic crises.
Components of Forex Reserves
- Holdings of foreign currencies and foreign government securities.
- Mainly U.S. Dollar, Euro, Pound and Yen.
- Around 85–90% of forex reserves.
Gold Reserves
- Physical gold held by RBI as a safe-haven asset and store of value.
- Around 8–10% of forex reserves.
- Current holdings: 880.52 tonnes.
- International reserve asset created by the International Monetary Fund.
- Around 1–3% of forex reserves.
- India’s reserve position with the IMF that can be accessed when required.
- Less than 2% of forex reserves.
Significance
- Supports rupee stability.
- Provides import cover, especially for crude oil.
- Enhances investor confidence.
- Acts as a buffer during external shocks and financial crises.
