FM Nirmala Sitharaman stated in the Lok Sabha on Monday that India’s expanding gold reserves, including those held by the RBI, are not meant to replace any international currency.
She answered to Congress MP Manish Tiwari‘s concerns about whether the global shift toward gold meant a shift away from the US dollar as the primary settlement instrument.
Sitharaman stated, “Gold is maintained in the Reserve Bank and purchased by the Reserve Bank. But, aside from that, there isn’t much I can say about an international or possible currency at this time.”
According to Congress MP Tiwari, since the United States abandoned the gold standard in 1971, gold has lost its significance as a key financial asset. However, in recent years, central banks around the world have expanded their gold reserves. Gold accounts for approximately 11% of world reserves in 2024, up from only 6% in 2006. Countries such as China, India, Poland, and Turkey have been among the most active importers, with domestic gold prices in India also rising. He was curious: “this shift away from the dollar to gold, does it indicate a renewed search for an alternative international settlement mechanism being cost the dollar?”