New Delhi – India’s central bank is steadily increasing its reliance on gold while reducing holdings of US Treasury bills (USTs) as part of its foreign exchange reserve strategy. The move reflects a broader global trend of diversifying away from the dollar amid rising geopolitical and trade uncertainties.
Gold Purchases on the Rise
According to data from the US Department of the Treasury and the Reserve Bank of India (RBI), India’s gold reserves rose to 879.98 metric tonnes as of June 27, 2025, up from 840.76 metric tonnes a year earlier. The RBI purchased around 39.22 metric tonnes in the past year, strengthening bullion’s role in the reserve mix.
US T-Bill Exposure Down
India’s UST investments fell to $227 billion in June 2025, compared with $242 billion a year earlier. Despite the reduction, India remains among the top 20 global investors in US T-bills, ahead of countries such as Saudi Arabia and Germany.
Nearly all of India’s outstanding UST holdings are part of its total forex reserves, which stood at $690 billion as of August 22, 2025.
Expert Views
Madan Sabnavis, chief economist at Bank of Baroda, said the shift shows India’s attempt to reduce dollar dependence. “Indian reserves have seen steady gold buildup, reflecting the wider global trend of diversifying away from the dollar amid trade conflicts and geopolitical tensions,” he explained.
Gaura Sengupta, economist at IDFC First Bank, added: “India’s UST holdings fell by $14.5 billion despite lower yields, signaling a deliberate move. The increase in gold helps mitigate revaluation risks tied to US fiscal concerns and elevated yields.”
Global Moves
India is not alone in recalibrating reserves. China, the third-largest holder of US T-bills after Japan and the UK, cut its exposure to $756 billion in June 2025 from $780 billion a year earlier. In contrast, Israel sharply raised its investments during the same period.
The changes highlight how central banks worldwide are reassessing the balance between traditional dollar assets and alternatives such as gold amid shifting global economic dynamics.
Source: News18 | Reported by Aparna Deb
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