RBI Shifts 100 Tonnes of Gold from London to India | Vantage with Palki Sharma

Recently a very special plane flew from the UK to India, very few people knew about it because the cargo was sensitive, around 100

tonnes

of

gold

and before you ask, no it was not an illegal smuggling ring, this is as legal as possible. This

gold

belongs. The Central Bank of India, the RBI or the Reserve Bank of India, until now it was stored in the Bank of England in London, but the RBI has returned it 100 tons of gold. It's happened for the first time since 1991. Now I know you have questions, so let's go. Go one by one, why does RBI hold gold?

Well, all the central banks in the world have gold reserves because unlike currencies, gold is stable, let's say your country falls into an economic crisis or is running out of dollars, you can use this gold to bail yourself out. so every country has gold reserves, in fact central banks own 177% of all the gold ever mined, 17% and how much does the RBI have? The Reserve Bank of India has around 822

tonnes

of gold, more than half of this was stored abroad, outside India. at the Bank of England and the Bank for International Settlements, which brings us to the second question: why was it stored well abroad?

Some of the gold was there even before independence. Indian gold. The gold was stored outside. The rest were shipped during the 1990s at that time. was facing an economic crisis, so the RBI kept gold in England. Actually, it is a common practice that the Bank of England stores 400,000 gold bars, four lakh gold bars, part of it belongs to Britain, the rest belongs to other central banks, they keep it in London for custody, but what? why in London? Why not in the country of origin? Because London is one of the most important gold markets in the world.

If you want to pledge your gold or want to sell it and raise money, then London offers you liquidity. New York is another important place. gold market, which is why the Federal Reserve is also a security vault, they also store foreign gold now, for question number three, why has India brought it back? For starters, you can save a lot of money. The Bank of England does not store its gold for free. charge a fee now you don't have to pay it second increase sovereignty if you keep your reserves abroad there is always a risk what happens if relations sour?

What happens if your reserves are confiscated? And there are many similar examples. Russia had some has about 300 dollars. billion reserves stored in the West have all been frozen after the Ukraine war, meaning Russia cannot access its own wealth. 300 billion dollars. Afghanistan is another example, its total reserves are worth 9.5 billion dollars. About 70%% of this is kept in the US, so when the Taliban came to power, the Americans froze this money. Kabul still does not have access to reserves. Now I am not saying that India and Britain will fight or that India's target will be frozen, but it is always safer to keep it at home. there is an emotional angle in the 1990s, India had to move gold abroad.

All Indians know what it feels like. Gold has sentimental value here. Pledge it or sell it is a last resort, but in the 1990s, India had no choice but to do so. That is why recovering the gold is a symbolic move like exorcising those demons and it has been a gradual journey for India in 2009 New Delhi took the first step brought 200 tonnes of gold bought 200 tonnes of gold from the international monetary fund which cost us around of $6.7 billion again the idea was the same: diversify and consolidate India's reserves 15 years later another measure has been taken now what will happen to this gold?

The 100 tons that have been brought well. The RBI has its own gold vaults. One is in the Mumbai office, the other is in Nagpur, so the 100 tonnes of gold will be stored there. It is a vote of confidence in the Indian economy. Our foreign exchange reserves are close to a record level, amounting to $464 billion, which is enough for 11 months of imports, so the RBI is confident that they do not foresee the need to pledge or sell this gold, hence the decision to recover it. I guess, combined with the GDP numbers, it is one of the best days for the Indian economy, first reports released from the world's second largest continent.

I'm Allison, I give you a very warm welcome from Durban, South Africa. We bring you the news and newsmakers from Africa. South Africa goes to the polls on May 29. I will follow the elections and bring you reports from the ground. Is it the end of the road for the African National Congress and will former president Jacob Zuma stage a dramatic return from elections to climate change to Innovations and opportunities as the world's attention

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