The Reserve Bank of India (RBI) also made purchases on Dhanteras. A new consignment of 102 tons of gold has been imported from Britain to India. 102 tonnes of gold have been transferred from the Bank of England to the Reserve Bank of India. Earlier, the RBI had imported 100 tonnes of gold from Britain in May. At the end of September, the RBI had a total of 855 tonnes of gold, of which 510.5 tonnes are now in India.
This move to demand gold from the Reserve Bank of India shows a change in strategy. Due to rising geopolitical tension, the Central Bank of India is bringing the gold it has abroad back to India, so that it is safe.
How does gold come from Britain?
India has recovered 214 tonnes of gold since September 2022, reflecting the RBI and government’s priority of bringing assets closer to home. According to government officials, keeping these reserves domestic increases certainty regarding inflation and the economy amid global tension. This gold is secretly brought from Britain via airplanes and other means.
In May, 100 tons of mortgaged gold were ordered
In early May, it was reported that India had already withdrawn 100 tonnes of gold from the UK, a large shipment built up during the 1990s. At the time, the government had pledged gold as collateral to foreign banks during the crisis. the balance of payments. So that money can come from abroad and Indian economy can improve. However, today India’s position is strong. In such a situation, the goal is to keep the money safe rather than using it in emergency situations.
Much of India’s gold is still in England
Currently, India’s 324 tonnes of gold reserves are under the supervision of the Bank of England and the Bank for International Settlements. Both banks are located in the United Kingdom. Known for its secure “bullion warehouses”, the Bank of England has been storing precious metals for global central banks since 1697, allowing it to take advantage of the liquidity benefits of the London bullion market.
If you look at India’s foreign exchange reserves, gold now stands at 9.3%, up from 8.1% in March. This has happened when gold prices have increased. It is currently at ₹78,745 per 10 grams in Mumbai, and is expected to reach ₹85,000 per 10 grams next year.
Why does RBI buy gold?
The purpose of holding gold in inventories by the central bank is primarily to diversify its foreign currency asset base as a hedge against inflation and currency risks. The RBI started collecting gold from the market regularly from December 2017. The aim was to increase the share of gold in the country’s total foreign exchange reserves from 7.75 per cent at the end of December 2023 to around 8.7 per cent. at the end of April 2024.
Where does RBI keep gold?
Within the country, gold is kept in safes located in the RBI building on Mint Road in Mumbai and Nagpur. According to the World Gold Council report, global central banks hold about 17 percent of all gold ever mined and by the end of 2023, reserves will exceed 36,699 metric tons (MT).
