India’s domestic gold reserves rise to 53%

India’s gold reserves stored abroad dropped to 47 per cent at the end of March 2024, marking a six-year low according to latest reports. The Reserve Bank of India (RBI) has been bringing back gold by the bulk to store in domestic vaults since March 2022, following the Russian invasion of Ukraine.

Thesquirrels had reported last month how the gold holdings of RBI stood at 822.10 tonnes as of March 31 2024, or the end of FY24, after India’s central bank brought back around 1 lakh kilograms, or 100 tonnes, of gold from the Bank of England in the United Kingdom to its vaults in the country, in the first such massive transfer move since 1991. With the move, the RBI aimed to substantially save on the storage cost being paid to the Bank of England.

Following the move, 53 per cent of India’s gold reserve is now in the country, growing from 794.63 tonnes of the precious metal that the central bank held in domestic vaults around the same time the year before, according to the RBI’s annual data.

The central bank’s decision to gradually bring back India’s entire gold reserves and store the same in domestic vaults has followed the action taken by the United States to freeze Russia’s foreign currency assets after the former’s invasion of Ukraine.

Gold constitutes around 8.7 per cent of India’s total foreign exchange reserve as of April 2024. The figure stood at 7.75 per cent at the end of December 2023.

India’s massive gold drain had happened in 1991 when the Chandra Shekhar government pledged 46.91 tonnes of gold million between July 4 and 18 with the Bank of England and the Bank of Japan, to raise $400 million in a bid to control the balance of payments crisis.

In India, gold is stored in the RBI’s vaults at Mint Road, Mumbai, and in Nagpur.