RBI flies 100 tonnes of gold from the UK to India: Now we store our gold in our own vaults!
The Reserve Bank of India (RBI) has moved over 100 tonnes of gold from the United Kingdom to its own vaults in India, marking the first such transfer since 1991.
As of April 26, 2024, the RBI’s gold reserves stood at 827.69 tonnes, an increase from 803.6 tonnes at the end of December, according to the latest data. More than half of these reserves are held overseas, primarily with the Bank of England.
According to Business Today, further repatriation of gold might occur annually. This move will help the RBI save on storage costs paid to the Bank of England. The last instance of significant domestic gold stockpiling occurred in 1991 when India faced a balance of payments crisis and the Chandra Shekhar government pledged 46.91 tonnes of gold to the Bank of England and the Bank of Japan, raising $400 million.
The RBI acquired 200 tonnes of gold from the International Monetary Fund (IMF) around 15 years ago. During the UPA government in 2009, under Prime Minister Manmohan Singh, India bought 200 tonnes of gold valued at $6.7 billion to diversify its assets.
In recent years, the RBI has steadily increased its gold reserves through market purchases, starting from December 2017. The central bank’s gold holdings are intended to diversify its foreign currency assets, hedge against inflation, and mitigate foreign currency risks. By the end of April 2024, gold constituted about 8.7 percent of India’s total foreign exchange reserves, up from 7.75 percent at the end of December 2023.
In India, the RBI stores gold in vaults located at its Mumbai Mint Road office and in Nagpur. According to the World Gold Council, global central banks collectively hold about 17 percent of all gold ever mined, with reserves totaling 36,699 metric tons as of the end of 2023. Central banks have been net buyers of gold since 2010, significantly increasing their holdings over the past 14 years.
