India Builds Gold Buffer As RBI Trims US Treasuries; Forex Firepower Still Strong
India is recalibrating its reserve mix, cutting back on US Treasuries while adding more gold, a shift reflected in recent data from the US Treasury and the Reserve Bank of India and reported by Economic Times, Business Standard, and other outlets. Holdings of US Treasuries fell to about $227$227 billion in June 2025 from $242$242 billion a year earlier, even as overall forex reserves remain near $690$690 billion, according to Business Standard and Times of India summaries of official data.
Gold gains traction
The RBI added roughly 39.22 metric tonnes over the past year, taking its stockpile to about 879.98 tonnes by June 27, 2025, per Economic Times and Business Standard reports citing RBI data. This constitutes one of the most notable year‑on‑year increases recently and signals a preference for gold as a stabilizing reserve asset amid market volatility, as highlighted by major business dailies.
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Diversifying beyond the dollar
India’s move aligns with a wider trend of reserve diversification as countries manage dollar‑specific risks and geopolitical uncertainty, with China’s US Treasury holdings easing to around $756$756 billion in June 2025 from $780$780 billion a year earlier, according to coverage drawing on US Treasury data. Some economies, such as Israel, moved the other way by increasing Treasuries, underscoring country‑specific strategies noted by Business Standard and Times of India.
Risk management lens
Economists quoted by Economic Times point to derisking motives, noting that India pared UST exposure despite yield dynamics, reflecting a longer‑term risk approach over short‑term returns. Analysts also cite concerns around US fiscal pressures and global frictions as reinforcing the case for diversification, as reported across Indian business media.
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Strong reserves, balanced mix
Despite the rotation, India remains among the top 20 holders of Treasuries and ahead of Saudi Arabia and Germany, while maintaining a sizable dollar cushion within total reserves near $690$690 billion, per Business Standard and Times of India. The RBI’s strategy emphasizes liquidity, stability and safety, with non‑yielding gold serving as a long‑term anchor within reserves, as reflected in Economic Times and allied reportage.