The Reserve Bank of India has significantly increased its gold purchases. The Indian central bank increased its bullion purchase from 18 tonnes in 2023 to 72.6 tonnes in 2024. The accelerated gold purchase has marked rumors about India pushing its de-dollarization move. Some may view the development as a move against the US dollar.
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India Accleratating Bullion Purchases To Replace The US Dollar?
The Reserve Bank of India held 876.18 tonnes as of December end 2024, worth around $66.2 billion. The figure marks a substantial increase from the 803.58 tonnes, worth about $48.3 billion, held at the end of December 2023.
Many have speculated that the increase in gold purchases could be India gearing up its de-dollarization move. Many believe the nation aims to use gold for international trade, replacing the greenback.
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The BRICS (Brazil, Russia, India, China, South Africa) bloc of nations has made significant strides to move away from the US dollar. There are also rumors about the BRIC nations creating a currency for mutual trade. President Trump has said that he would impose heavy tariffs on nations moving away from the US dollar.
Is India Pushing For De-Dollarization?
Indian Member of Parliament, Manish Tiwari, questioned Finance Minister Nirmala Sitharaman on whether the gold purchase was a step to move away from the US dollar. The Finance Minister said India is not pushing for de-dollarization. Sitharaman reiterated that the gold purchases were to diversify the country’s financial holdings.
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The de-dollarization has taken a significant hold among developing countries. India has previously said that it does not intend to replace the US dollar for trade. India does have some agreements with partner countries to use the rupee for mutual trade.