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The Reserve Bank of India has returned 130 tonnes of gold, marking a 60% increase in domestic gold holdings over the past two-and-a-half years.
RBI’s Domestic Gold Holding Increases
- The domestic gold holding of RBI increased to 510.46 metric tonnes as on September, 2024, against 295.82 metric tonnes as on March 2022.
- The RBI has about 324 metric tonnes of gold in its possession with the Bank of England now as against 453.52 metric tonnes in March 2022.
- The percentage of gold in India’s overall foreign exchange reserves has increased from 8.15% at the end of March 2024 to about 9.32% at the end of September 2024.
Gold Held in Bank of England
- The Bank of England possesses one of the largest gold vaults in the world storing around 400,000 bars of gold for most central banks around the world.
- These 324 tonnes of its gold stock should, however, continue to stay under the Bank of England and Bank for International Settlements’ arrangements; these collectively have huge gold reserves lying overseas in India.
- About 20 tonnes is also serviced through the gold deposit schemes.
RBI Gold Asset Bring Back Plan
- Gold reserves are increasing worldwide among central banks as means of hedging against inflation and more reduced dependency on the U.S. dollar.
- Apart from this, India has been the fastest in acquiring gold since the invasion of Ukraine by Russia among G20 countries, better than Russia and China.
- It is considered to be in line with this global trend since repatriating and storing gold in domestic banks is also a stamp of strong confidence in the economy’s resilience.
Increase in Safe-Keeping Capacity
- Therefore, the Bank of England has been returning gold to India because it offers an improved capacity for keeping gold physically within the country.
- Foreign exchange reserves of India on 25 October 2024 would be at an all-time high of $684.8 billion as sufficient for international payments for just over 11.2 months.
- Gold reserves on the other hand give India an…
