In a significant move aimed at reducing storage costs, the Reserve Bank of India (RBI) has repatriated around 100 tonnes of its gold reserves from the United Kingdom to its own vaults in India.
This marks the largest overseas transfer of gold by the country since 1991, according to recent media reports.
India Repatriates 100 Tonnes of Gold from UK; A Symbolic Reversal of 1991 Crisis
Sanjeev Sanyal, Economist & member of the Prime Minister’s Economic Advisory Council, commented on the development. He stated, “While no one was watching, RBI has shifted 100 tonnes of its gold reserves back to India from the UK.”
He emphasized the historical significance of this transfer, contrasting it with the crisis of 1991 when India had to ship out its gold.
“Most countries keep their gold in the vaults of the Bank of England or similar locations 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 amid a crisis,” Sanyal added.
He highlighted the emotional impact of this move, especially for those who remember the economic hardships of the early 1990s.
“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.”
India’s Gold Reserves Soar To 822 Tonnes By 2024
In 1991, facing a severe foreign exchange crisis, the Indian government under Prime Minister Chandra Shekhar pledged 46.91 tonnes of gold with the Bank of England and the Bank of Japan to secure $400 million in funds for essential imports.
This event remains a poignant reminder of the country’s past economic vulnerabilities.
As of March 31, 2024, the RBI held 822.10 tonnes of gold as part of its foreign exchange reserves, up from 794.63 tonnes the previous year, according to the annual data released by the central bank.
Over half of the RBI’s gold reserves are stored overseas with the Bank of England and the Bank of International Settlements, while approximately one-third is kept in the RBI’s vaults in Nagpur and Mumbai.
The central bank, like many others globally, has been increasing its gold holdings as a strategy to hedge against inflation and mitigate foreign currency risks, particularly in light of geopolitical uncertainties.
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.
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