Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday said that the move to relocated 100 metric tonnes of its gold from bank vaults in the United Kingdom to its own vaults in India should not be overinterpreted, as the domestic storage capacity is sufficient.
The RBI Governor further noted that the amount of gold held abroad had remained unchanged for a significant period.
"In recent years, the data shows that the Reserve Bank of India is buying gold as a part of its reserves, and the quantum was going up," he said.
"We have enough domestic storage capacity. Therefore, it was decided to move part of the reserve outside India to be stored within the country. That’s it. Nothing more should be read into it,” he added.
Given our ample domestic storage facilities, we decided to transfer part of our external reserves back to India. There's nothing more to it," stated the RBI Governor.
This move will also help save on the expensive annual fees that India has been paying for UK vault storage. This would be the first significant overseas transfer of its gold reserves by India since 1991 when the country faced one of its worst-ever financial crises. The government under Prime Minister Chandra Shekhar had pledged 46.91 tonnes of gold to the Bank of England and the Bank of Japan to raise $400 million for some much-needed imports.
At present, more than half of the RBI's gold reserves are held abroad-majority with the Bank of England and the Bank of International Settlements-and a third is in storage at the RBI vaults in Nagpur and Mumbai.
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