In a landmark move, the Reserve Bank of India (RBI) has transferred over 100 tonne of gold from the United Kingdom to its domestic vaults, marking the first significant repatriation of gold since early 1991.
This shift comes as part of the central bank’s strategic management of its gold reserves and highlights a broader trend of central banks globally increasing their gold holdings as a hedge against currency volatility and geopolitical risks.
According to a report by the Times of India, the RBI’s decision to repatriate the gold was driven by logistical reasons and the need for diversified storage. The central bank also plans to bring a similar quantity of gold to India in the coming months.
As of the end of March 2024, the RBI held a total of 822.10 tonnes of gold, with 408.31 tonnes stored domestically. The recent addition of over 100 tonnes significantly bolsters the gold reserves held within the country.
The World Gold Council (WGC) reported that the RBI purchased 19 tonnes of gold in the first quarter of 2024, surpassing the 16 tonnes bought throughout 2023. The RBI resumed gold acquisitions in 2018, with a notable purchase of 200 tonnes during the global financial crisis in 2009.
How will RBI benefit from this
Storing gold domestically could result in cost savings for the RBI, as it would eliminate storage fees paid to foreign custodians like the Bank of England. Additionally, it signals confidence in the stability of the Indian economy.
Noted economist and Prime Minister’s Economic Advisor, Sanjeev Sanyal, emphasized this point in a recent post on X, stating, “While no one was watching, RBI has shifted 100 tonnes of its gold reserves back to India from UK. Most countries keep their gold in the vaults of the Bank of England or some such location (and pay a fee for the privilege). India will now hold most of its gold in its own vaults. We have come a long way since we had to ship out gold overnight in 1991 in the midst of a crisis.”
The move by the RBI highlights its strategic approach to managing foreign exchange reserves, ensuring greater control and security over the nation’s gold assets. This repatriation of gold is not only a testament to India’s growing economic confidence but also a step towards enhancing the country’s financial resilience.
The RBI’s actions reflect a broader global trend where central banks are increasing their gold reserves, recognising the precious metal’s value as a safe-haven asset in times of economic uncertainty. As the RBI continues to bolster its gold holdings, it reinforces the stability and strength of India’s economic position on the global stage.
Read all the World News, Business News, Sports News, Entertainment News, Business News and Opinion here. Follow us on Facebook, Twitter and Instagram
