RBI gets our 100 tonnes of gold from the UK to India!
For the first time since 1991, India has undertaken a significant repatriation of its gold reserves. The Reserve Bank of India (RBI) has transferred approximately 100 tonnes of gold. From bank vaults in the UK back to its own vaults in India, in a strategic move aimed at saving storage costs, according to media reports.
Economist Sanjeev Sanyal, a member of the Prime Minister’s Economic Advisory Council. Commented on this development, stating, “While no one was watching, RBI has shifted 100 tonnes of its gold reserves back to India from the UK. Most countries keep their gold in the vaults of the Bank of England or similar locations, paying 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.”
Sanyal further reflected on the historical significance of this move, “For those of my generation, the shipping out of gold in 1990-91 was a moment of failure that we will never forget. This is why this shipping back of gold has a special meaning.”
RBI gets our 100 tonnes of gold from the UK to India!
In 1991, facing a severe foreign exchange crisis, the Indian government under Chandra Shekhar pledged 46.91 tonnes of gold to the Bank of England and the Bank of Japan to secure $400 million needed to pay for essential imports. This moment marked a low point in India’s economic history.
Currently, more than half of the RBI’s gold reserves are held overseas in secure custody with the Bank of England and the Bank of International Settlements. The remainder is stored in the RBI’s vaults in Nagpur and Mumbai. As of March 31, 2024, the central bank held 822.10 tonnes of gold as part of its foreign exchange reserves, an increase from 794.63 tonnes the previous year.
The RBI, like other central banks, has been increasing its gold holdings as a safe-haven asset. This strategy aims to hedge against inflation and reduce foreign currency risks, particularly during times of geopolitical uncertainty. Consequently, the share of gold in India’s total foreign exchange reserves rose from 7.75% at the end of December 2023 to about 8.7% by the end of April 2024.