Data shows that the RBI started bringing the gold to India in March 2022, coinciding with the start of the Russia-Ukraine war.
This is in line with the trend of central banks globally that have turned cautious after the US government froze Russian foreign currency assets as the conflict began in February 2022.
News that the RBI had brought back 100 tonnes of gold from the UK to India emerged at the end of last month. Governor Shaktikanta Das said this was because there is enough domestic storage capacity and nothing more should be read into it. At the end of March, the RBI’s total gold holdings amounted to 822.1 tonnes.
A December 2023 survey by global investment manager Invesco of 57 central banks and other asset managers showed that they had increased exposure to gold 8-10 years ago, keeping it in London and using it for swaps and to enhance yields.
Trend Seen Continuing Globally
But, the survey noted, they were now moving the reserves back to their own countries, underscoring the metal’s role as a safe-haven asset.
From 50% in 2020, the share of gold reserves held in their own countries is estimated to have gone up to 68% by December 2023 and will likely rise to 74% in the next five years, according to the survey.
The RBI’s reserves follow a similar pattern. From 39% in September 2021, the share of gold held at home went up to 53% by March 2024. This marks a turnaround from 1991 when India had to fly gold overseas as part of a pledge to avoid defaulting on payments.
