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yesterday was dantas in India a festival
that comes right before Diwali a lot of Indians like to buy gold on this day it's seen as very auspicious just ask RBI even they have jumped in on the craze as you know the RBI is India Central Bank The Reserve Bank of India yesterday they revealed a key development the RBI secretly shipped 102 tons of gold from London to India 102 tons of gold and this was not a purchase this gold already belonged to the RBI it was only stored in London but imagine logistics again we're talking about 102 tons of metal a bit like transporting 20 adult elephants over thousands of kilometers so how did the RBI do it naturally they have not revealed everything but Reports say special flights were chartered security was stepped up and once in India all taxes and Customs were waved overall a the RBI has vaults in Mumbai and nagpur chances are the gold will be stored there but why was this this decision now to answer that we must go back to the 1990s when India was facing a financial crisis it was running out of dollars to import Goods so the the then government of India decided to pledge its gold we're talking about loans you can't get them in your local gold market you need Global Trade Centers like New York or London so the RBI sent tons of gold to the bank of England this gold was pledged there in exchange for a loan of course the loans have long been repaid but India's gold remained there and logistically it did make sense the gold would be near the London bullion market so if the need accessed then why is it being brought back now well because of two reasons one India's foreign reserves are very healthy now they stand at 6 $88 billion enough to cover more than 11 months of imports so the RBI is more confident a repeat a repeat of the 1990s looks virtually impossible now secondly because of geopolitics yes Britain is on good terms with India but equations can always change and if they do a big chunk of our gold will gold will be on British soil what if they decide to freeze it or Worse sell it off that's what the West is doing to Russia when the Ukraine war started Russia had around 600 $ billion in reserves that's Gold Plus currencies plus assets nearly half of that was held abroad mostly in Western countries $300 billion and what did the West do they froze those $300 billion in assets meaning Russia could not access its own wealth now don't get me wrong India and Britain are not going in that direction but it's always better to have your assets at home especially if your economy is robust the the RBI is thinking along the same lines they have around 8 855 tons of gold in reserves 855 tons around 510 tons of that is now home so more than half is within India a similar operation was done in the month of May this year as well the RBI brought London and now another 102 tons should we expect more in the future Reports say the government is open to such operations but not this year and it's not just about repatriating gold it's also about stocking up the RBI bought 32 tons of gold from April to September gold made up 8% of the reserves in the month of March now it makes up more than 9% of India's Reserve so clearly The Reserve Bank is on a buying spree the question is why because gold is a safe asset it is not volatile it is reasonably liquid and it can diversify your reserves you may have noticed is that in recent times when there is a war or natural disaster gold prices remain stable or they increase which is very different from currencies or oil which can go either way so it's a good backup for central banks it's good for them to have more gold in fact central banks hold nearly 20% of all gold ever mined we have a list the US has around 8,000 tons of gold Germany has more than 3,000 tons of gold Italy has more than 2, 400 and so does France but guess who outranks all of them Indian households ordinary Indians are sitting on 27,000 tons of gold I'll repeat that 27,000 tons of gold yes it's clearly an obsession but in those countries gold makes up almost 70% of government reserves compare that to developing nations in China it's 5% in India as I said it's 9% so expect this landscape to keep evolving of course that's a discussion for another day today it's all about celebrating this reversal from pledging gold abroad in the 1990s to proudly bringing it back home now it's a story of India's economic resilience and 
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