India cuts US Treasury holdings to $181bn

The Reserve Bank of India reduced its US Treasury holdings to $181 billion in April, data showed, a six-year low for the country’s holdings. The move accompanied a substantial rise in the central bank’s gold stock to 881 metric tonnes, the central bank announced; FX market reaction is pending.

RBI increases gold to 881 tonnes

Data showed the central bank shifted part of its foreign-asset allocation away from US Treasuries and into gold, citing the metal’s role as a stable reserve asset. Officials said gold holdings are less exposed to interest-rate shifts and sovereign debt market volatility, and present a diversification from dollar-denominated securities.

The drop to $181 billion is the lowest level since 2020, according to the reserve figures. For currency markets, the change alters the composition of official dollar assets without necessarily selling large volumes of Treasuries in public markets; officials said the adjustment reflects portfolio mix decisions rather than a sudden liquidation.

This rebalancing matters for emerging-market FX because reserve composition affects perceived capacity to defend the currency during stress. If other central banks continue to add gold, demand dynamics for safe assets could shift over time, altering global dollar liquidity conditions.

By July 15, 2026, market participants will watch sovereign reserve releases and FX intervention disclosures for evidence of further shifts in India’s reserve mix.