Right now, there are many discussions going on in the international markets regarding India’s foreign exchange reserves and the strategies adopted by its central bank. Recently, a report by Bloomberg Economics claimed that the Reserve Bank of India (RBI) has sold a large part of its gold reserves amid rising tensions in West Asia. However, the fact-checking wing of the Press Information Bureau (PIB) has completely refuted this claim. Amidst all this controversy, the most important question arises: where—inside the country or abroad—and how is India’s vast gold reserves being kept safely?
**Bloomberg Economics report*
A report by Bloomberg Economics has created a stir in global financial markets. This report claims that the Reserve Bank of India has sold gold in an attempt to protect its foreign currency assets in view of tensions in the Middle East (West Asia). According to the report, in the two-week period ending May 22, the central bank sold gold worth about $12 billion—or about ₹1.14 lakh crore—worth in the open market. During the same period, the RBI is reported to have purchased foreign currency assets worth $7.5 billion to balance its financial portfolio.
**PIB’s fact-checking proved these claims to be completely false**
To check the factual accuracy of this claim, the fact-checking team of the Press Information Bureau (PIB) conducted a detailed investigation. The investigation revealed that there is no truth in the claim that the Reserve Bank of India sold gold worth $12 billion; This claim is completely fabricated. PIB clarified that there is no confirmation of any such transaction or sale in the official and authentic financial records of the central bank. As a result, this news report is completely baseless, misleading and incorrect, and should not be relied upon.
**The exact mathematics behind RBI’s total gold reserves**
A review of storage data shows that as of the end of March, the Reserve Bank of India had a huge and safe reserve of 880.52 metric tonnes of gold. Interestingly, about 77% of this total gold reserves are currently held in India’s own domestic vaults. Just six months ago, the situation was slightly different, when only 66% of the gold was present within the country; However, by changing its security strategies, India has rapidly increased its domestic reserves in recent times.
**Russia-Ukraine war and reason for bringing back gold from abroad**
After the conflict between Russia and Ukraine began, Western countries froze various foreign assets of Russia. Following this incident, central banks of many emerging economies around the world, including India’s RBI, have become even more cautious. Fearing geopolitical risks and international sanctions, central banks have started bringing back their gold held abroad. Following the same strategy, India has also recalled its gold from foreign banks and transferred it to its country’s safe reserves.
**India’s ultra-secure stores in Mumbai and Nagpur**
Of India’s total gold reserves – which is more than 880 metric tons – more than 575 metric tons of gold is currently held within the country’s borders. This large and highly secured portion of gold is kept safe by the Reserve Bank of India in its state-of-the-art, ultra-secure reserves located in Mumbai and Nagpur. The Central Bank’s special reserves located in these two cities are under an impenetrable 24-hour security perimeter, designed to deal with all possible technical and physical threats.
**Where is the rest of India’s gold kept?**
After keeping 77% of its gold in the country’s reserves, the rest is still held abroad – a decision taken keeping in mind international security and liquidity concerns. The largest and main part of these foreign reserves is safely deposited in the ‘Bank of England’ located in London, the capital of the United Kingdom. Historically, many of the world’s largest countries have relied on this British central bank for the safety of their gold reserves.
Apart from the ‘Bank of England’, some part of India’s gold reserves is also safely deposited in the ‘Bank for International Settlements’ (BIS) located in the city of Basel, Switzerland. Holding a portion of gold reserves with international banks is considered essential, and is considered strategically beneficial for promoting international trade, providing immediate liquidity in times of crisis, and facilitating smooth transactions in global markets.
