The Reserve Bank of India (RBI) has achieved a significant milestone by repatriating 100 tons of gold from the Bank of England. This move is expected to positively impact the Indian economy. Back in the day, India had to mortgage its gold overseas to meet financial needs, and now it is gradually bringing it back home.
RBI Bringing Back Overseas Gold
According to a report by the Times of India, citing RBI officials, the RBI will repatriate 100 tons of gold to India in the coming days. This is the first such instance since 1991 when India will add such a large quantity of gold to its reserves. As of March 2024, RBI’s gold reserves stood at 822.1 tons, with about 413.8 tons held overseas. The central bank is now gradually bringing this gold back.
RBI Leads in Gold Purchases
The report mentions that in recent years, the RBI has been at the forefront of gold purchases among central banks worldwide. In the last financial year alone, it added 27.5 tons of gold to its reserves. Historically, the Bank of England held the largest gold reserves among central banks, and before India’s independence, Indian gold was also stored there. RBI officials noted that the bank started buying gold a few years ago and decided to review its strategy to repatriate gold from overseas. With growing gold reserves in other countries, the RBI decided to bring some of this gold back to India, considering future scenarios.
Impact on Economy
Gold holds a special place in the hearts of Indians, intertwined with their emotions, faith, and worship. In 1991, under the Chandra Shekhar government, India faced a dire economic situation, exacerbated by the Gulf War, particularly with Iraq. The government took steps that negatively impacted the Indian economy, leading to the need to mortgage gold. However, around 15 years ago, in 2009, the RBI purchased approximately 200 tons of gold from the International Monetary Fund (IMF).
