Reasons Why Did RBI Keep Its Gold In Britain?

During the foreign exchange crisis in 1990-91, India pledged part of its gold reserves to the Bank of England to secure a $405 million loan.

Although the loan was repaid by November 1991, the RBI chose to keep the gold in the UK for logistical reasons

This arrangement facilitated ease of trading and proximity to global financial markets

Historically, storing gold in foreign vaults allowed for efficient international transactions and liquidity.

However, in recent times, the RBI has reevaluated its strategy and decided to repatriate a substantial quantity of gold back to India.

By bringing the gold back to India, the RBI saves on storage fees paid to foreign custodians, such as the Bank of England.

This decision also signals confidence in the stability of the Indian economy.