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Gold

Representational image from Wallpaper Cave

RBI says another 102-ton gold shifted to India from Bank of England's vaults

India Blooms News Service | @indiablooms | 30 Oct 2024, 01:24 pm

#Gold, #RBI, #BankOfEngland

New Delhi/IBNS: The Reserve Bank of India (RBI) on Wednesday (Oct. 30) announced the relocation of another 102 tonnes of gold from the Bank of England's vaults in London to secure locations within India.

The announcement has been made when the country is celebrating Dhanteras, which symbolizes prosperity and health.

This move by the central bank follows a previous transfer on May 31, when the RBI shifted over 100 tonnes of gold from the UK to India, marking the first such transfer since early 1991.

Like before, the RBI and the Indian government carried out a covert mission, employing special aircraft and implementing comprehensive security measures to ensure the secrecy of the operation.

A report by the Times of India (ToI) mentioned that further transfers of gold from the UK to India are anticipated.

However, it is unlikely that substantial shipments will occur within this year.

Since September 2022, a total of 214 tonnes of gold have been relocated to India, reflecting the RBI and the government’s strategy to safeguard their reserves amid rising geopolitical tensions globally.

Officials cited by ToI have expressed a growing sentiment within the Indian government to maintain gold reserves within the country, particularly in the context of increasing global uncertainties.

Gold is widely regarded as a safe-haven asset due to its stability during economic downturns.

Unlike currency notes, it cannot be devalued through overprinting, making it a robust hedge against inflation.

Moreover, gold prices tend to be less volatile compared to stocks and other securities, reinforcing its reliability as a financial asset.

According to the latest report on the management of foreign exchange reserves, as of the end of September, the RBI's total gold reserves stood at 855 tonnes.

Of this, 510.5 tonnes are held domestically. Meanwhile, approximately 324 tonnes remain stored at the Bank of England and the Bank for International Settlements, with most of these reserves still in the UK.

Additionally, the RBI has placed around 20 tonnes of its gold holdings in deposits.

The Bank of England has traditionally served as a primary depository for central banks worldwide, and India's gold reserves in London date back to the pre-Independence era.

By relocating gold to domestic vaults, the RBI is also expected to reduce storage costs paid to the Bank of England.

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