Why rbi is buying gold: In recent times, the frequent gold and major purchases by the Reserve Bank of India (RBI) have caught the attention of both experts and the general public. In June 2025, RBI has again made a big gold purchases, according to the report, half a ton (more than 500 kg) has been bought and bought, which raises the question as to why the central bank is buying so much gold? Is this a sign of any crisis in the country, or is there a deep economic strategy behind it? Let us understand the reasons behind this trend and the importance of gold.
Rbi Why is buying so much gold,
There are many important economic and strategic reasons behind increasing gold purchases by the Reserve Bank of India:
1. Diversification of foreign exchange reserves: The foreign exchange reserves of any country are a measure of its economic stability. This mainly includes major foreign currencies, government bonds and gold like US dollars, euros, pounds. Instead of depending on only one or two currencies, the RBI is extending the stake of gold in it. This reduces the risk of a heavy fall in the value of a single currency.
2. Defense against inflation and geopolitical uncertainty: Gold is traditionally considered an effective defense against inflation. When inflation increases or there is an atmosphere of global economic uncertainty, investors and central banks consider gold as a safe investment. Russia-Ukraine war, global trade stress and other geopolitical events are attracting central banks towards gold.
3. Reducing dependence on dollar: The US dollar is still a global reserved currency, but the central banks of many countries now want to reduce their excessive dependence on the dollar. Gold purchases are a part of this strategy to strengthen their economic sovereignty.
4. Improvement of portfolio performance: Gold is considered an asset that performs well even in unstable time. Increasing the gold stake in its reserves can improve the performance of its total foreign exchange reserves.
How much gold reserves do India have,
The Reserve Bank of India is constantly purchasing gold, which is increasing India’s gold reserve. Gold stake in India’s foreign exchange reserves is increasing rapidly. According to the report, gold stake in India’s foreign exchange has increased from 8.9 percent to 12.1%. By July 2025, RBI has a total stock of gold to 879.98 tonnes. In FY 2024-25 itself, RBI bought 57.5 tonnes of gold, which is the second largest annual purchase after 2017. This indicates that RBI considers gold as an important part of its total reserves.
How gold is a protector in the hour of crisis,
Sona is called the ‘protector of the crisis’ or ‘safe haven asset’, and there are many reasons behind it:
1. Purability of Price: During the economic recession, the decline in the stock market or during inflation, when the value of other properties falls, the value of gold often remains stable or increases. This offers investors a way to keep their money safe.
2. Liquidity (Liquidity): Gold is a highly liquid property, which can be easily converted into cash. This facility is very important during emergency or crisis.
3. Physical property: Unlike paper currencies or digital properties, gold is a physical property that has its own internal value. This also makes it reliable in situations such as the collapse of financial systems or cyber attacks.
4. No credit risk: There is no credit risk of any government or institution on gold, as is on bonds or other financial instruments. This makes it an independent and safe investment.
