There is no likelihood of use of gold in reserves in the foreseeable future. Nevertheless, India has devised mechanisms by which a part of the gold holdings of RBI could be converted into usable foreign currency. An incidental issue relates to the policy on enhancement or otherwise of gold component in the foreign exchange reserves and the way it is managed.
The proportion of gold in our reserves is coming down in view of accretion to foreign currency reserves and the policy in regard to both holdings and management has been passive. Secondly, an issue common to many central banks is the advantage in clearly spelling out policy objectives in regard to forex reserves.