On Dhanteras, the Reserve Bank of India reported that it has moved 102 tonnes of gold from the Bank of England vault in London to safe locations within the country.
The new report on management of foreign exchange reserves showed that at the end of September, of the 855 tonnes of gold held with the RBI, 510.5 tonnes was kept in safe custody in the country.
214 tonnes of gold brought into the country since September 2022
Since September 2022, 214 tonnes of gold has been brought into the country. The government wants to keep gold safe 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 May also
Earlier on May 31, a report said that 100 tonnes of gold has been brought to India from the UK. India's economic condition weakened in the early 1990s and it had to pledge its gold. This was the first time that so much gold had returned to India.
Like last time, the RBI and the government ran a secret mission with special aircraft and security arrangements to bring the gold into the country. To keep the gold safe, it was kept in mind that no information of any kind was leaked.
RBI keeps gold abroad along with India
RBI keeps gold not only in India but also abroad. Central banks of all countries want to keep gold in different places, so that the risk can be reduced. First of all, the safety of gold is kept in mind.
If the economic situation in India worsens due to disaster or political instability, then gold kept abroad comes in handy to overcome it. Natural disasters can also cause damage to gold reserves. This risk is reduced by keeping gold in different places.
Britain is a warehouse of gold for many central banks.
Britain's Bank of England has traditionally been the storehouse of gold for many central banks. Some amount of gold is already stored in London before India's independence, because before independence, Britain kept India's gold in the Bank of England. Therefore, even after independence, India kept some gold in London.
About 324 tonnes of India's gold is 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.
UK's bullion warehouse was built in 1697
“Bullion Warehouse” – built in 1697 and later expanded to store gold from Brazil to Australia and California to South Africa. It contains approximately 4 lakh gold bars. In September, these safes contained about 5,350 tonnes of gold.
Gold maintains economic stability, hence is stored
If a country's currency weakens internationally, gold reserves help maintain the purchasing power of that country and its economic stability. In 1991, when India's economy was sinking and it did not have dollars to import goods, it raised money by mortgaging gold and came out of this financial crisis.
Having a lot of reserves means that the country's economy is strong. It also shows that the country manages its money well. In such a situation, other countries and global financial institutions trust that country more. Gold reserves provide a solid asset to support the currency value of any country.
Graphics Source: VaskarAssets
