RBI reserve management

De - dollarisation and gold surge: Explained

Rising geopolitical tensions, policy uncertainty in the United States, and concerns over excessive reliance on the US dollar have accelerated the global trend of de-dollarisation, prompting central banks to diversify their foreign exchange reserves. A key outcome of this shift has been a strong surge in gold prices, as gold is seen as a safe, politically neutral store of value during times of financial and geopolitical instability. For India, the Reserve Bank of India has increased the share of gold in its reserves while gradually reducing exposure to dollar-denominated assets, strengthening the resilience and stability of the country’s external sector.