On Dhanteras, the Reserve Bank of India reported that it had moved 102 tonnes of gold from the vaults of the Bank of England in London to safe places within the country.
Of the 855 tonnes of gold held by the RBI at the end of September, 510.5 tonnes of gold was kept in safe custody in the country, a new report on management of foreign exchange reserves showed.
From September 2022 till now 214 tonnes of gold was brought into the country
Since September 2022 till now 214 tonnes of gold has been brought into the country. Governments want to protect gold amid rising geopolitical tensions around the world. Many people in the government believe that keeping gold at home is safer.
100 tonnes of gold was brought to India in the month of May as well
Earlier on May 31, a report said that 100 tonnes of gold has been brought to India from the UK. In the early 1990s, India's economy weakened and they had to pledge their gold. This was the first time that so much gold was returned to India.
Like last time, the RBI and the government conducted a secret mission with special aircraft and security arrangements to bring the gold into the country. Care was taken to ensure that no information was leaked to protect the gold.
Apart from India, RBI also keeps gold abroad
RBI holds gold not only in India but also abroad. Central banks of all countries want to keep gold in different places, so as to reduce risk. First of all the safety of gold is kept in mind.
If the economic situation in India deteriorates due to a disaster or political instability, gold held abroad comes in handy. Natural disasters can also damage gold reserves. This risk is minimized by keeping gold in different places.
Britain is a gold warehouse for many central banks
Britain's Bank of England has traditionally been the repository of gold for many central banks. A certain amount of gold is stored in London before India's independence, because before independence Britain kept India's gold in the Bank of England. So India kept some gold in London even after independence.
About 324 tonnes of India's gold in the Bank of England
Now, 324 tonnes of gold is kept in the safe custody of the Bank of England and the Bank for International Settlements. Many countries keep their gold in the Bank of England. It is the second largest gold custodian after the New York Federal Reserve.
The UK Bullion Warehouse was created in 1697
Bullion Warehouse- Built in 1697 and later expanded to store gold from Brazil to Australia and from California to South Africa. It contains approximately 4 lakh gold bars. In September, these vaults contained about 5,350 tonnes of gold.
Gold maintains economic stability, so it is hoarded
If a country's currency weakens internationally, gold reserves help maintain that country's purchasing power and economic stability. In 1991 when India's economy was sinking and it had no dollars to import goods, it raised money by pledging gold and came out of this financial crisis.
Having plenty of reserves means that a country's economy is strong. It also shows that the country manages its finances well. In such a situation, other countries and global financial institutions trust that country more. Gold reserves provide solid assets to support the currency value of any country.
Image Credit: (Divya-Bhaskar): Images/graphics belong to (Divya-Bhaskar).
