New Delhi (TIP)- The Reserve Bank of India (RBI) has shifted over 100 tonnes of gold from the UK to its vaults in the country. More gold is likely to be brought back with decisions on this yearly, sources told Business Today. This is the first time since 1991 that the precious metal has been added to the stock kept in the country.
More than half of RBI’s gold reserves are held overseas in safe custody with the Bank of England and the Bank of International Settlements, and about a third of it is stored domestically.
The move will also help RBI save storage costs, which are paid to the Bank of England.
According to the data released by the RBI, the central held held 822.10 tonnes worth of gold as a part of its foreign exchange reserves as of March 31, 2024, up from 794.63 tonnes held during the same period last year.
In 1991, the Chandra Shekhar government pledged the precious metal to tackle the balance of payments crisis. Between July 4 and 18, 1991, the RBI pledged 46.91 tonnes of gold with the Bank of England and the Bank of Japan to raise $400 million.
The central bank bought 200 tonnes of gold from the International Monetary Fund (IMF) around 15 years ago.
In 2009, during the UPA government’s tenure, with Manmohan Singh as prime minister, India bought 200 tonnes of gold valued at $6.7 billion to diversify its assets.
Over the last few years, a steady build-up in gold stocks has taken place through purchases by the Reserve Bank.
The central bank’s objective of holding gold in reserves is mainly to diversify its foreign currency assets base, as a hedge against inflation and foreign currency risks. The RBI has started to accumulate gold regularly from the market since December 2017.
The share of gold in the country’s total foreign exchange reserves increased from 7.75 percent at the end of December 2023 to about 8.7 percent as of April 2024 end.
Within the country, gold is held in vaults in RBI’s building on Mumbai’s Mint Road as well as Nagpur.
According to a World Gold Council report, global central banks own about 17 percent of all the gold ever mined, with reserves topping 36,699 metric tons (MT) as of year-end 2023. They acquired the vast majority in the last 14 years after becoming net buyers of the metal in 2010.
Source: Business Today