The share of gold in value terms in India’s total foreign exchange reserves increased to about 7.06 per cent as of end-September 2022 from about 5.88 per cent as of end-September 2021, according to Reserve Bank of India data.
During the aforementioned period (September 2021 to September 2022), the RBI’s gold holding increased by 41.51 metric tonnes to 785.35 metric tonnes.
While 447.30 metric tonnes of gold is held overseas in safe custody with the Bank of England and the Bank of International Settlements (BIS), 296.48 metric tonnes of gold is held domestically, per RBI’s latest Half Yearly Report on Management of Foreign Exchange Reserves.
At the end of June, foreign exchange reserves cover of imports (on balance of payments basis) declined to 10.4 months from 11.8 months at end-March 2022 and 15.8 months at the end of June 2021.
The ratio of short-term debt (original maturity) to reserves, which was 20 per cent at end-March 2022, increased to 22 per cent at end-June 2022, per the report.
The ratio of volatile capital flows (including cumulative portfolio inflows and outstanding short-term debt) to reserves increased from 66.6 per cent at end-March 2022 to 67.6 per cent at end-June 2022.
On a balance of payments basis (excluding valuation effects), foreign exchange reserves increased by $4.6 billion during April-June, compared with increase of $31.9 billion during April-June 2021.
Foreign exchange reserves in nominal terms (including valuation effects) decreased by $18.2 billion during April-June, compared with increase of $34.1 billion in the corresponding period of the preceding year.