Among worries around depleting foreign exchange reserves and foundering currency, several Indian newspapers had described possibilities of the government leasing out its official gold holdings to lift money reserves. However, the country’s financial Affairs department asserted that for now India has no suggestion to lease gold.
In 1991, when India faced balance of fee urgent situation, the country responded by protecting an crisis lend of $2.2 billion from the worldwide Monetary Fund (IMF) upon promising 67 tons of the official gold reserves as collateral. The country’s apex banking body had to airlift 47 tons of gold to the Bank of England and the balance 20 tons to the amalgamation Bank of Switzerland.
In the recently resolved India International Gold Convention-2013(IIGC-2013), David Gornall, Chairman, LMBA proposed the homeland could believe over promising its gold reserves for a swap which could generate short period funds to the extent of $23 billion. The statement alarmed the participants. Subsequent newspapers citing unidentified investment ministry agents described that the homeland may swap the 200 tons of gold remaining overseas, prepared for sale.
Although, the Economic activities Secretary, Arvind Mayaram in a text message clarified that the government is presently not contemplating raising money lend by swapping the IMF-bought 200 tons gold for payable currency.
The country actually holds the world’s 11th biggest gold reserves. According to World Gold Council (WGC) statistics antiquated July 2013, the authorized gold holdings by the homeland stand at 557.7 tons, constituting 8.6% of the national forex reserves.