India's US Treasury holding hits a 6-year low amid gold push

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India's holdings of US Treasuries dropped to $181 billion in April, the lowest in nearly six years, as the Reserve Bank of India shifted its foreign asset strategy towards increasing gold reserves. Gold holdings rose to 881 metric tonnes, highlighting diversification amid potential geopolitical risks and financial sanctions.

Mumbai: India's holdings of US Treasuries fell to $181 billion in April, the lowest level in nearly six years, data from the US Federal Reserve showed. A reduction in US debt was offset in part by an increase in bullion stockpiles, reflecting India's portfolio diversification strategy for foreign assets.New Delhi's holding of US Treasuries declined sharply from $232 billion a year earlier, reflecting a sustained reduction in the Reserve Bank of India's (RBI) exposure to US government debt.India's holdings had fallen below this level way back in May 2020, when they stood at $169 billion.The decline points to a shift in the RBI's foreign exchange reserve management strategy, with the central bank reducing its allocation to US Treasury securities, while investing heavily in gold.Over the past one year, the RBI increased its gold reserves to 881 metric tonnes, from 879 metric tonnes in April 2025. Six years ago, India's gold holdings stood at 658 metric tonnes. The value of gold reserves currently is at $102.5 billion, RBI data showed.132274703"We have seen foreign currency assets (FCA) decrease over the past one year, so natural holdings of US T-bills, which are a part of FCA, have decreased," said Madan Sabnavis, chief economist at Bank of Baroda.Sabnavis, however, highlighted the strategic position of gold and how 'it does not belong to any particular country'."Gold will never be sold in a routine scenario like controlling the volatility of rupee, it only adds numerical value to our reserves. However, in extreme situations, such as severe financial sanctions or a loss of access to foreign currency assets, gold can be monetised or pledged," he said.This was highlighted in 2022, after Western sanctions on Russia froze a significant portion of its foreign exchange reserves, reinforcing gold's role as a reserve asset that carries no risk and remains accessible even during periods of geopolitical stress.The Reserve Bank of India is not alone in increasing its gold holdings. Central banks across the world have also been steadily accumulating the precious metal. Central banks of Poland, China, Czech Republic and Turkey remained net buyers of gold in April, according to data from the world gold council.On the other hand countries like Japan, United Kingdom, Belgium, France and Canada have net purchased US Treasury bills.