Due to market concerns that have heightened risk aversion, the Reserve Bank of India (RBI) has increased its gold holdings. Gold’s share of the country’s foreign exchange reserves increased from 6 percent on March 20, 2020, according to an analysis of RBI data by Moneycontrol, to 7.85 percent on March 24, 2023.
On March 24, 2023, the RBI‘s gold reserves were at Rs 3.75 lakh crore, up from Rs 2.09 on March 20, 2020.
According to observers, the move is not exclusive to the Indian central bank because other significant central banks have also shifted their holdings to gold in the wake of Covid, as they have become more risk cautious in the face of increased inflation and interest rate swings.