.......Augmenting the Gold Proportion in RBI's Forex Reserves Quite apart from measures to mobilise domestic gold, the RBI should consider raising the proportion of gold in RBI's forex reserves from the present level of 9 to 20%. This makes eminent sense as it would diversify the risks as between holdings in major currencies- US dollar, Euro, yen and sterling- and gold. Such a composition of the reserves would enable a better preservation of the value of the forex reserves. It is noteworthy that China has embarked on an aggressive increase in the central bank's reserves of gold by 1,000 tonnes per year and in a few years, China's central bank will be the largest holder of gold.
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