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India Repatriates 100 Tonnes of Gold from UK, More May Come

VBL's Photo
by VBL
Friday, May 31, 2024 - 13:17

Authored by GoldFix ZH Edit

 In a significant move, the Reserve Bank of India (RBI) has repatriated 100 metric tonnes (1 lakh kg) of gold from the United Kingdom to domestic vaults during FY24. This strategic decision, carried out in utmost secrecy by officials from the Ministry of Finance, the RBI, and other agencies, marks one of the largest gold movements by India since 1991, when gold was pledged to mitigate a foreign exchange crisis.

Enhanced Gold Holdings

With this repatriation, India’s total gold holdings have risen to 822 metric tonnes as of FY24, with 27.46 metric tonnes added in the current fiscal year. According to official data, the distribution of these reserves is now almost evenly split between domestic and foreign vaults. The annual report reveals that 413.79 metric tonnes are held abroad, while the recent transfer has increased the local holdings to over 408 metric tonnes.

Strategic Asset Allocation

The RBI’s annual report for FY24 details that more than 308 metric tonnes of gold are held domestically to back issued notes, with an additional 100.28 tonnes categorized as assets of the banking department. This strategic shift aligns with India’s broader foreign exchange asset diversification efforts, which have included significant gold purchases in recent years. Notably, in 2009, India acquired 200 tonnes of gold from the International Monetary Fund (IMF) and has since continued to purchase gold from the secondary market.

Secure Storage and Future Outlook

The locally held gold is stored in high-security vaults in Mumbai and Nagpur, ensuring its safety and integrity. Sources indicate that the decision to reduce foreign-held gold was part of routine review procedures, reflecting ongoing efforts to optimize the country’s foreign exchange reserves.

This development underscores India’s commitment to maintaining robust gold reserves and diversifying its foreign exchange assets. The careful and confidential handling of this operation highlights the high value and strategic importance of the nation's gold holdings.

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