India's Gold Reserves Not Aimed At Replacing Any Currency: FM

2025-02-11 02:12:32

(MENAFN- KNN India) New Delhi, Feb 11 (KNN) Finance Minister Nirmala Sitharaman addressed concerns in the Lok Sabha on Monday regarding India's increasing Gold reserves, emphasising that the accumulation is not intended to replace any international currency.

The clarification came in response to questions raised by congress MP Manish Tiwari about the global trend of central banks increasing their gold holdings.

During the parliamentary session, Tiwari highlighted the historical context, noting that gold's role as a major financial asset had diminished after the United States abandoned the gold standard in 1971.

However, he pointed to a significant shift in recent years, with global central banks substantially increasing their gold reserves.

The proportion of gold in global reserves has nearly doubled from 6 percent in 2006 to approximately 11 percent in 2024, with nations such as China, India, Poland, and Turkey emerging as prominent buyers.

Addressing these observations, Finance Minister Sitharaman acknowledged the Reserve Bank of India's ongoing gold purchases but maintained a measured stance on its broader implications.

"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," she stated.

The Finance Minister elaborated on the domestic context of gold demand in India, attributing the strong appetite for the precious metal to cultural and economic factors.

She emphasised that Indian households, small businesses, and women traditionally view gold as a secure and liquid investment option.

Regarding the Reserve Bank of India's strategy, Sitharaman explained that the central bank's gold acquisitions are part of its efforts to maintain a balanced reserve portfolio, which includes the US dollar as a dominant component along with other international currencies.

(KNN Bureau)

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