RBI has repatriated 100 tonnes of gold from UK to India

Move aims to save on storage costs paid to the Bank of England

As of March 31, 2024, the RBI held 822.10 tonnes of gold

In a significant financial maneuver, the Reserve Bank of India (RBI) has repatriated approximately 100 tonnes (1 lakh kilograms) of gold from the United Kingdom to its domestic vaults, marking the first large-scale transfer since 1991. This strategic move aims to save on storage costs currently paid to the Bank of England.

Historically, over half of the RBI’s gold reserves have been held overseas in secure custody with institutions like the Bank of England and the Bank of International Settlements. However, with this transfer, India will now hold a substantial portion of its gold reserves domestically.

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As of March 31, 2024, the RBI held 822.10 tonnes of gold as part of its foreign exchange reserves, a notable increase from the 794.63 tonnes reported the previous year.

This transfer underscores India’s evolving financial stability and independence, contrasting sharply with the 1991 crisis when 46.91 tonnes of gold were pledged to raise $400 million. The central bank’s strategy of increasing gold reserves is aimed at diversifying assets, hedging against inflation, and mitigating foreign currency risks.

The RBI’s efforts to accumulate gold since December 2017 have resulted in an increase in the share of gold in India’s total foreign exchange reserves from 7.75% at the end of December 2023 to 8.7% by April 2024. This move aligns with global trends, as central banks have become net buyers of gold since 2010, with global reserves reaching 36,699 metric tons by the end of 2023.