Central banks around the world, especially in developing countries, are buying gold to keep their economies safe. Gold helps protect money when global situations become uncertain. In November, central banks added a total of 53 tonnes of gold to their reserves. Poland led the way with 21 tonnes, followed by Uzbekistan with 9 tonnes. China also joined the trend, buying 5 tonnes of gold after a six-month gap.
The RBI’s gold buying is a smart move to make India’s financial system stronger. Gold acts like a shield during economic challenges, such as when currency values change or global problems arise. By increasing its gold reserves, the RBI ensures that India’s savings are safe and ready to handle any shocks.
At the same time, India’s total foreign exchange reserves have been going up and down. On December 27, 2024, these reserves stood at $640.28 billion, which is the lowest in eight months. This drop happened because the RBI used some of these reserves to control the rupee’s value and stop it from weakening further.
The RBI’s decision to buy more gold is a smart way to protect India’s money. Many countries are doing the same to stay strong during uncertain times. These steps will help India face any challenges in the future.