BOMBAY: The Reserve Bank of India (RBI) has held 25 tonnes of gold from its reserves with the Bank of England in expectation of raising a 200 million dollar loan to honor the nation’s debt servicing obligations, the RBI governor, MR S Venkitaramanan, said here.
The gold consignment was air-freighted July 7 through the UK-based Heavy Lift cargo airlines Amid heavy security and a team of RBI officials was already in London to negotiate the terms of the loan deal.
In addition, India was also negotiating a further 200 to 250 million dollar assistance under the cash compensatory financing facility, the RBI governor said.
Mr. Venkitaramanan clarified that the RBI had neither sold the gold for swapped it, but had only moved the precious metal to deposit it with the Bank of England to borrow foreign currency, if necessary.
“The Reserve Bank of India has taken the Step as a matter of abundant caution. The loans will be triggered only when we want it,” he stressed.
Article extracted from this publication >> July 12, 1991
