Why RBI is Moving its Gold Back from England: Key Reasons Explained

On Dhanteras (October 29, 2024), the Reserve Bank of India (RBI) declared that it had moved an additional 102 tons of gold from the Bank of England to safekeeping facilities in India. 

RBI has a well-thought-out plan to move the gold in a discreet and safe manner. But why is RBI bringing back its gold from foreign? Read below to know more.

RBI’s Gold Reserves Breakdown

In its report titled "43rd Half Yearly Report on Management of Foreign Exchange Reserves: April - September 2024," the RBI stated that it had a total of 854.73 metric tons of gold in both domestic and foreign repository facilities.

Of this, 324.01 metric tons of gold were held in the custody of the Bank for International Settlements (BIS) and the Bank of England, while 510.46 metric tonnes were retained domestically. Additionally, 20.26 metric tons of gold were stored as deposits.

Why is RBI Bringing Back Gold?

Approximately 214 tons have been returned to India since September 2022. The government of India has decided to prioritize protecting its assets in the face of global geopolitical unrest. About 100 tons were returned from the Bank of England in May.

This is also because, according to the study, the proportion of gold in India's overall foreign exchange reserves rose from 8.15% at the end of March 2024 to roughly 9.32% at the end of September 2024.

Why Does RBI Stores Gold in England?

The main reason the RBI keeps gold in England is because it can easily access the London bullion market. The New York Federal Reserve is still the largest gold custodian in the world, followed by the Bank of England.

Gold is a beneficial addition to foreign exchange reserves because it is perceived as a safer, liquid asset that performs well in times of crisis.

ALSO READ: India Opens Its First Military Aircraft Manufacturing Factory: Discover Which State Will Be the Hub

ALSO READ: Has India Tackled the Problem of Unemployment? Check Latest RBI Report on Employment Growth Rate