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RBI bought 6 tonnes of gold and likely sold $ 7 bn worth US treasury secs

The Reserve Bank bought almost six tonnes of gold and likely sold $ 7 billion worth US treasury securities this April in what seems to be its strategy of diversifying its forex reserves management.

The value of India’s – essentially the Reserve Bank of India’s – US treasury securities dipped $ 7.1 billion in April to take the value of outstanding US treasury securities’ (USTs) exposure to $233.5 billion at the end of the month, according to the data released by the US treasury department late on Tuesday.

In comparison, India bought about $ one billion worth of USTs in April of 2023 and the stock of gold was almost flat at 794 tonnes in the same period.

The RBI’s strategy is in line with that of the other major central banks globally who have been accumulating gold and discarding dollar denominated assets as the geopolitical tensions escalate. Foreign central banks have lowered their exposure to the USTs by $30 billion, the data released by the US Treasury department shows.

On the other hand, central banks globally bought a record 290 tonnes of gold in the January-March quarter with Chinese and Turkish central banks accounting for the maximum purchases during the quarter, data from the World Gold Council indicates.

The Reserve Bank has started to accumulate gold regularly from the market since December 2017, but has intensified its pace of accumulating over the past two years amidst rising geopolitical tensions

“We are building up gold reserves, the data is released from time-to-time” said RBI governor Shaktikanta Das at the post policy media conference on April 5. “All aspects while building up the reserves are assessed and then we make a decision.”


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