Prepare apampblet to discourage gold usage among the people as sufficient reserves are not available in India ?
Answers
Answer:
While gold acts as a diversifier and does not carry any default risk, certain factors would warrant restricting the extent of holdings
The Reserve Bank of India’s transactions in gold have always attracted much attention. The pledging of gold with the Bank of England in 1991 to meet the balance of payment crisis is still considered a nadir for the Indian economy. There was also much patriotic cheer when 200 tonnes of gold were purchased from the IMF in 2009.
It is, therefore, surprising that not much attention has been given to the RBI’s revised stance towards accumulation of gold reserves. India’s gold reserves have been increasing at a steady pace over the last three years. These purchases have added 137 tonnes to the gold reserves between December 2017 and March 2021. The share of gold in India’s foreign exchange reserves has increased to 7 per cent currently, from 5 per cent in March 2017.
Explanation: