Asking for Vide-Gousset.

Over the last two years India's central bank has been bringing our gold back to India, "physically moving bullion that was stored in vaults abroad to domestic storage inside India." "The Reserve Bank of India (RBI) held 880.52 metric tonnes of gold as of end-March 2026," constituting 16.7% of India's foreign exchange reserves. The total value of our gold reserves is Rs 8.36 trillion and the value of the 680.05 tonnes stored in India is Rs 6.46 trillion. Zee. If RBI's move was a masterstroke, the Banque de France executed a double masterstroke. Instead of physically transferring the gold bars, "Between July 2025 and January 2026, it sold 129 tonnes of older non-standard gold bars" at record high prices at the time. "It then used the proceeds to purchase higher standard bullion on the European market and stored it in Paris." Making a profit of 12.8 billion euros. ET. From 1963 to 1966, "France secretly repatriated a vast portion of its gold -- in an operation dubbed Vide-Gousset (French for emptying the pocket). Under the operation, France brought back 3,000 tonnes from New York and London using ships and aircraft. A section of economists see this as one of the key triggers that put pressure on the Bretton Woods gold convertibility system." NDTV. In 1971, then President Richard Nixon abolished the Gold Standard, which ended the Bretton Woods system and ushered in fiat currencies. wikipedia. This was one of the reasons for the stagflation of the 1970s. As a result, "Central banks have a greater degree of control over their nations' money and the management of variables such as interest rates, overall money supply, and velocity." They can take radical monetary policy actions such as quantitative easing (QE). It has created a large market for hedging currency risks and "The financial crisis of 2007-2008, in particular, proved that central bank control is no guaranteed defense against severe recessions." Investopedia. "RBI Governor Sanjay Malhotra...called for Indian banks to emerge as market-makers, urging a more active global role for domestic lenders as the central banks seeks to shift rupee price discovery onshore." "When offshore rates diverge from domestic spot and forward markets, arbitrage and hedging flows transmit those signals back onshore, allowing offshore sentiment to drive local pricing." TOI. Will foreign investors be comfortable with this system? In March, the RBI suddenly "announced new rules capping the open positions banks can hold in the onshore currency market at $100 million at the end of each trading day. The change, effective April 10, forces lenders to shrink their books, limiting their ability to run large one-sided bets against the rupee." This caused heavy losses to banks. ET. This does not look like price discovery. It looks as if the RBI wants all hedging to happen in India so that it can control it. Foreigners investing in India would want a better value for their investment. Betting is banned in India but Rs 250 billion have been wagered on the assembly election results on foreign platforms through the internet, using cryptocurrencies. The Federal. Repatriating gold is for protection. But you don't trade in gold. You trade in currencies. Market making is not possible if the RBI changes rules suddenly. Why should banks take the risk? It would be Vide-Gousset.