RBI Moves 100 Tonnes of Gold from UK Vaults
In a significant move, the Reserve Bank of India (RBI) has transferred over 100 tons of gold from the United Kingdom to its domestic vaults. This marks the first time since 1991 that such a significant amount of the precious metal has returned to India.
Increase in Gold Reserves:
According to the latest data released by the RBI, the central bank's gold reserves stood at 827.69 metric tons as of April 26, 2024. This reflects a notable increase from the 803.6 metric tons recorded at the end of December last year. The decision to repatriate gold underscores a strategic effort by the RBI to bolster its gold holdings within the country.
Historical Context:
The significance of this move lies in its historical rarity. Not since 1991 has the RBI opted to augment its domestic gold reserves to this extent. The decision signals a shift in approach to safeguarding the nation's wealth by ensuring a greater portion of its gold reserves are physically within its borders.
Reduction in Overseas Holdings:
Currently, more than half of the RBI's gold reserves are overseas, primarily with the Bank of England and the Bank of International Settlements. By repatriating a substantial portion of these reserves, the RBI aims to reduce its reliance on foreign custodians and enhance its control over its assets.
Cost-saving Measures:
In addition to strategic considerations, cost-saving benefits yield for the RBI through the repatriation of gold from the UK. By storing a larger portion of its gold reserves domestically, the central bank can minimize storage expenses incurred in maintaining overseas custody arrangements, particularly with the Bank of England.
Future Prospects:
Sources familiar with the situation suggest that further repatriation of the gold reserves is likely, with decisions made on an annual basis. This suggests a concerted effort by the RBI to continue strengthening its domestic gold reserves over the foreseeable future.
