RBI’s gold holdings jump over 17% to a whopping ₹2,30,734 crore

RBI’s gold holdings jump over 17% to a whopping ₹2,30,734 crore
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  • In the last financial year (FY23), RBI increased its gold holdings, shows its annual report. This even as gold imports dropped by 24% in the same period.
  • This increase in value is due to an addition of 28.94 metric tonnes of gold by the RBI and also due to the rupee depreciating vis-à-vis the US dollar.
  • RBI’s higher income from investments helped it pay 2.5x higher dividends to the Government of India.
Higher prices may have curbed gold imports but a closer look at the Reserve Bank of India’s annual report shows that India’s central bank increased its bullion holdings in the financial year gone by. As import of the precious yellow metal declined 24.2% to 35 tonnes as on 31 March 2023, the total gold held by the Reserve Bank weighed at 794.63 metric tonnes as compared to 760.42 metric tonnes it held in the previous year. In other words, India’s central bank bought an additional 34.21 metric tonnes of gold during the year.

According to the RBI’s annual report, of the 794.63 metric tonnes it held on 31 March 2023, 301.09 metric tonnes of gold was held as backing for currency notes it issued. In the comparative period last year, it held 295.82 metric tonnes of gold against currency notes. In March 2023, the RBI held 493.54 metric tonnes of gold as asset of Banking Department. In the previous financial year, the RBI held 464.60 metric tonnes as assets.

The value of gold (including gold deposit) held as an asset by the central bank’s Banking Department increased by 17.20% from Rs 1,96,864.38 crore as on March 31, 2022 to Rs 2,30,733.95 crore as on March 31, 2023. This increase was on account of addition of 28.94 metric tonnes of gold and also due to increase in the price of gold and depreciation of INR vis-à-vis US dollar.

Balance sheet impact

The rise in RBI’s gold holdings and increase in the value of gold also expanded its balance sheet in the financial year 2022-23. According to the central bank’s annual report, the size of the balance sheet increased by Rs 1,54,453.97 crore ( +2.50%) from Rs 61,90,302.27 crore in March 2022 to Rs 63,44,756.24 crore on 31 March 2023. The increase on the asset side was due to a rise in foreign investments, gold, and loans and advances by 2.31 per cent, 15.30 per cent and 38.33 per cent, respectively.


According to analysts, the bumper income from forex sales and higher interest income on its holdings of domestic and foreign securities has helped the RBI to pay a higher than expected dividend to the Government of India. According to Nomura, “The RBI’s annual report released today unpacks the dynamics behind the higher-than-expected dividends transferred to the government of INR874bn (~0.3% of GDP) versus ~INR350bn pencilled in the FY24 budget.”

According to the Japanese investment bank, the sharp increase in the RBI’s income comes from profits from its FX sales (INR1.0trn), reflecting its active FX intervention. In addition, higher interest income (INR1.3trn) on its holdings of domestic and foreign securities has more than offset losses on its liquidity operations.

It has been reported earlier that the central bank was expected to pay the Government of India dividend to the tune of Rs 95,000 crore, which is 2.5 times higher than the Budget estimates. Economists are of the view that this windfall gains may not protect the fiscal deficit from slipping beyond 5.9% of GDP. Nomura’s economists are of the view that the fiscal dynamics have a lot of moving parts – with a potential undershoot of nominal GDP growth, lower tax buoyancy, an overly tight budget for revex and ambitious capex targets. “As such, the risk to the FY24 fiscal deficit target of 5.9% of GDP is still towards slippage.”