On Dhanteras, October 29, 2024, the Reserve Bank of India (RBI) revealed that it successfully transported an impressive 102 tonnes of gold from the Bank of England to secure storage facilities in India. This strategic move was part of the RBI’s meticulous planning to ensure the safe and discreet transfer of such a significant quantity of gold, reinforcing the nation’s reserves while aligning with the festive spirit of the occasion.
Transportation Strategy
Current Gold Holdings
Recent Trends
Increase in Gold’s Share
Reason for Storing Gold in England
Importance of Gold Reserves
Historical Role as Reserve Currency
Intrinsic Value and Inflation Hedge
Impact on Currency Strength
Counteracting Negative Interest Rates
Geopolitical Hedge
Diversification of Forex Reserves
Summary/Static | Details |
Why in the news? | RBI’s Diwali’s Plan Transporting 102 Tonnes from England |
Objective | Reinforce India’s gold reserves and ensure the safety of financial assets amid geopolitical tensions |
Current Gold Holdings | Total gold reserves: 854.73 metric tonnes (as of April-September 2024 report) – 510.46 metric tonnes held domestically – 324.01 metric tonnes stored with Bank of England and BIS – 20.26 metric tonnes held as gold deposits |
Reason for Storing Gold in England | Access to the London bullion market and gold custodianship by the Bank of England and BIS |
Economic Significance of Gold | – Historical role as reserve currency until 1971 – Acts as a hedge against inflation due to its intrinsic value – Strengthens currency value, especially when gold prices rise |
Key Reasons for RBI’s Gold Accumulation | – Counteracts negative interest rates and rising inflation (US government bonds) – Geopolitical hedge (e.g., Russia-Ukraine conflict) – Diversification of forex reserves as a safer, liquid asset |
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