Reserve Bank of India hastens repatriation of gold held abroad

India’s central bank now holds more than 65% of its gold reserves at home, nearly double the share from four years ago, accelerating the repatriation of the precious metal after Western nations froze Russia’s reserves following the invasion of Ukraine.

The Reserve Bank of India brought back nearly 64 tons of gold in the first six months of the financial year that began in April, it said in a half-yearly report on foreign exchange reserves Tuesday. In value terms, gold accounted for 13.92% of total reserves at the end of September, up from 11.70% at the end of March. The RBI generally keeps part of its gold overseas, held at the Bank of England and the Bank for International Settlements.

As of the end of September, the RBI held 880 tons of gold, of which 576 tons were stored domestically — an all time-high. Gold held locally accounted for about 38% of the total in September 2022.

The RBI didn’t give a reason for the shift, but some economists have suggested the move was may be aimed at enhancing control over the nation’s bullion assets after Group of Seven nations, including US, and the European Union, seized Russia’s reserves in 2022 following its invasion of Ukraine. Over the past four years, India’s central bank has repatriated nearly 280 tons of gold. Finance Minister Nirmala Sitharaman said last month the RBI was taking a “very considered decision” to diversify its reserves.