NEW DELHI: FM Nirmala Sitharaman on Monday clarified within the Lok Sabha that India’s rising gold reserves, together with these held by RBI, is not supposed to replace any worldwide foreign money.
She responded to Congress MP Manish Tiwari’s issues about whether or not the worldwide shift in direction of gold signalled a transfer away from the US greenback as a dominant settlement mechanism.
Sitharaman mentioned, “Gold is also kept in the Reserve Bank and gold is also being bought by the Reserve Bank. But beyond that, as regards an international currency or potential currency, there is not much for me to comment at this stage.”
Congress MP Tiwari said that because the US deserted the gold normal in 1971, gold had misplaced its significance as a serious monetary asset. However, lately, central banks worldwide have elevated their gold holdings. From constituting solely 6% of world reserves in 2006, gold now makes up about 11% in 2024. Countries like China, India, Poland, and Turkey have been among the many most aggressive patrons, and home gold costs in India have surged as effectively. He requested “this shift away from the dollar to gold, does it indicate a renewed search for an alternative international settlement mechanism being cost the dollar?”
Responding to this, She acknowledged that gold demand in India stays robust and has even grown. She attributed this to the normal choice of Indian households, small companies, and ladies for gold as a safe and liquid funding.
Regarding RBI’s gold purchases, she confirmed that the central financial institution is accumulating gold to preserve a balanced reserve portfolio. While the US greenback has been a dominant part of India’s international trade reserves, the RBI additionally holds reserves in different currencies and gold.
