Value of India’s Gold Reserves Reduces By 44%

goldMumbai: Gold free fall has wiped out 44% of the value of gold reserves with the Reserve Bank of India (RBI) compared with the peak levels in 2011, according to Firstpost.

The report marks that at the recent five-year low of $1,072.35 per ounce on 20 July, the value of the RBI’s gold reserves plunged to about $21.1 billion, down by 44 percent, from $37.8 billion as of September 2011, when gold prices had peaked to a record high of $1,921.15 ounce. On 23rd July, gold prices rose to $1,098.27 an ounce, up 0.33% from the previous close.

The RBI currently has 557.75 metric tonnes gold in its reserves. Gold is a key constituent of the RBI’s foreign exchange reserves. The others include foreign currency assets, special drawing rights and reserves held in International Monetary Fund. Currently, gold constitutes about 5.4 percent of the reserves in terms of value.

Technically, the slide in value should not be a major worry for the central bank if one takes a long-term view. Over the years, the RBI’s gold reserve value has appreciated multi-fold when the yellow metal had a long period of bull-run. In that sense, the drop in the gold value is notional. The RBI’s gold holding has remained constant for many years now.