In the wake of reports that claimed that the Reserve Bank of India may have sold USD 12 billion gold to rescue rupee, the Central Bank has clarified that physical stock of gold remains unchanged at 880.52 tonnes as on date.
“The Reserve Bank of India (RBI) has come across reports in certain sections of the media about RBI’s sale of gold. The RBI emphasizes that these reports are not correct. In this context, it is clarified that the physical stock of gold is disclosed by RBI in its Monthly Bulletin. The latest edition is available on the RBI website at: https://www.rbi.org.in/Scripts/BS_ViewBulletin.aspx?Id=24213,” RBI said in its press release.
Members of public are, therefore, advised to rely on official information published by RBI from time to time in such matters.
The Indian government has also debunked reports by Bloomberg that claimed that the RBI may have sold gold to rescue the decline in rupee. PIB Fact check has said that the claim is fake, and has urged people to read the latest edition of RBI’s Bulletin on physical stock of gold.
Abhishek Gupta, senior India economist at Bloomberg Economics, estimated that the RBI likely sold nearly USD 12 billion in gold during the two weeks ending May 22, while simultaneously purchasing around $7.5 billion in foreign-currency assets.
Meanwhile, last month, Chairman of the 16th Finance Commission and former NITI Aayog vice-chairman Arvind Panagariya stated that the Reserve Bank of India should let the rupee depreciate at this moment and not treat the Rs 100 per dollar mark to determine policy response. Panagariya said India’s macroeconomic situation has significantly improved since 2013. With inflation below target the country is better equipped and able to withstand the inflationary effects of a depreciating currency.
In a post on X, Panagariya stated that 100 is just a number and that allowing the rupee to weaken is the best course of action right now. “Dear RBI, do not let the psychology of Rs 100 per dollar determine your policy response. 100 is just a number, like 99 and 101. Whether the oil shortage is short-lived or long-lived, the right response at this moment is to let the rupee depreciate,” Panagariya posted on X.
Panagariya’s remark came as the rupee touched the key 100 per dollar mark in the one year forward market recently.
