According to the latest data released by World Gold Council, Reserve Bank of India (RBI) will soon become the tenth largest holder of the metal in the world overtaking the Netherlands, reports Business Standard (BS).
RBI added 6.5 tonnes of gold to its reserves in January (2019), taking its total reserves of the metal to 607 tonnes. The Netherlands currently holds the tenth rank with 612.5 tonnes, just around 5.5 tonnes more than RBI.
Also, the share of gold held by India when compared to other nations has risen steadily over the years and stood at 6.2 per cent at the end of 2018. It went further up in January.
Hedge Against Dollar
It should be noted that RBI is not alone in increasing its gold reserves. According to the Council, central banks of various countries added as much as 35 tonnes on a net basis (gross purchases of 48 tonnes less gross sales of 13 tonnes) in January alone to their kitties.
This could be due to the widespread feeling among the central banks for the need to diversify their reserves at a time when the US dollar was strengthening. Gold has been traditionally viewed as a stronger hedge against the dollar when compared to other currencies.