Stock Market News|RBI buys gold for first time in nearly a decade
The Reserve Bank of India (RBI) has bought gold for the first time in nearly a decade, signaling that the metal could be in demand as a store of value when returns and capital values of fixed-income bonds are declining in a rising rate environment.
The RBI added 8.46 metric tonnes of gold to its stock of holdings during the financial year 2017-18 that ended June 30, taking the level of gold reserves to 566.23 metric tonnes, according to its latest annual report.
It last bought 200 metric tonnes from the IMF to boost its reserves in November 2009.
Over the past nine years, the gold stock in RBI reserves was stable at 17.9 million troy ounces. But RBI has started adding to its stock since December 2017, data submitted to the IMF indicate.
The stock of gold, as of June 30, amounted to 18.20 million troy ounces or equivalent to 566.23 metric tonnes, up from 17.9 million troy ounces in November 2017.
The RBI’s decision to buy gold is significant because unlike many other central banks such as the People’s Bank of China, RBI does not regularly trade in gold, although the RBI Act permits it to do so.
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