Golden Shield: RBI Stacks Record Reserves to Ditch Dollar Risks

India’s central bank has struck gold—literally. The Reserve Bank of India (RBI) has ramped up its gold holdings to a record 879.58 tonnes as of March 2025, marking a nearly 30% surge since mid2020. This strategic accumulation reflects a broader global trend: central banks are hedging against dollar volatility and geopolitical uncertainty by turning to the timeless allure of gold.

Key Highlights:

Gold now accounts for 12% of India’s net foreign assets, up from 8.3% a year ago, driven by both fresh purchases and soaring global prices.
The RBI’s gold stash rose by 218 tonnes over five years, nearly double the increase seen in the previous fiveyear period.
India has also repatriated a significant portion of its gold from foreign vaults, signaling a push for greater control over its reserves.
The World Gold Council reports that central banks globally have bought over 1,000 tonnes of gold annually for three consecutive years, with 95% expecting further increases.
This gold rush comes amid a gradual decline in the dollar’s share of global reserves, now at 57.8%, down from 65.4% in 2016.
While India’s exposure to U.S. Treasuries has plateaued, its gold strategy offers a diversified buffer against financial shocks and shifting global alliances.

As the world’s monetary tectonics shift, India’s glittering reserves are more than just a hedge—they’re a statement of strategic autonomy in an increasingly multipolar world.

Sources: Moneycontrol, Economic Times, World Gold Council