Will the buffer buffer?

Following Covid, "the Reserve Bank of India (RBI) has quietly outshone its counterparts with what some are calling a masterclass in monetary management. While peers like the US Federal Reserve and Bank of England nursed losses, the RBI closed FY 2024-25 with an 8.2% growth in assets and a net income surplus of $31.5 billion." "The RBI's $894.3 billion balance sheet came with a standout feature: a robust risk buffer of $53.6 billion, equating to 6% of its assets." msn.com. "The balance sheet of the RBI increased to Rs 76.25 trillion, aided by nearly 33% gains in foreign exchange transactions, as of March 2025, leading to a bumper Rs 2.7 trillion dividend to the central government." "Increase on assets side was due to rise in gold, domestic investments and foreign investments by 52.09%, 14.32% and 1.70% respectively." Mint. The RBI profits from seigniorage, which is the difference in the face value and the cost of printing a note. It costs Rs 2,290 to print 1,000 notes of Rs 500 (TOI), which means each note costs Rs 2.29 to print. So, the RBI makes a profit of Rs 497.71 on each note. The RBI earns from interest lending to commercial banks at market rates and from currency volatility by buying dollars when the rupee is stronger and selling when it is weaker. The RBI is to buy Rs 1.25 trillion worth of government bonds from the market. CNBC. The reason for purchasing assets is the "desire to lower interest rates on risk-free assets (such as government bonds) across different terms to maturity of those assets - that is, across the yield curve." rba.gov.au. This is to lower borrowing costs. The RBI held a total of 879.58 metric tonnes of gold till 31 March 2025, adding 57.48 metric tonnes during the financial year. TOI. The gold reserves are valued at Rs 4.31625 trillion. RBI's foreign exchange reserves rose by $6.99 billion to $692.72 billion in the week ended 23 May. Foreign currency assets by $4.52 billion. msn.com. "The RBI is reviewing its 'liberalised remittance scheme', which saw outflows of around $30 billion in FY25, as it looks to rationalise the facility and promote the rupee as an international currency." ET. It has been diversifying its foreign exchange assets across various currencies to protect against "weaponisation of reserves" or sanctions, in other words. ET. A 3.5% tax on remittances to India by non-resident Indians in the US will lower the amount of dollars coming into India. India received $33 billion remittances from the US in 2023-24. Also, elimination of jobs in tech companies due to AI will force many Indians on H1B visas to return home (FE), which will also cut remittances into India. It is wise to maintain a $53.6 billion risk buffer but will that be enough if the price of gold drops or if there is a sell off in Indian government bonds as the RBI lowers rates further (ET) while the Fed keeps its Funds rate steady at 4.25% to 4.5% (CNBC)? Will the buffer suffice? Will it buffer us?