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India Reduces US Treasury Holdings, Gold Reserves Surge
The India reduces US Treasury holdings trend continues as the country shifts its investment focus toward gold reserves. According to the latest data, India has significantly decreased its exposure to U.S. debt and increased gold purchases, marking a major change in its forex reserves strategy.
Why India Reduces US Treasury Holdings?
The decision to cut down on U.S. Treasury bills is influenced by multiple factors:
- Rising global uncertainties affecting dollar stability
- Geopolitical risks impacting U.S. debt markets
- Diversification strategy to minimize risk
As per Times of India’s report, India’s U.S. Treasury holdings have dropped by billions, making room for a gold-heavy portfolio.
Gold Reserves See a Strong Rise
India’s gold reserves have increased to 879.98 metric tonnes, up from 840.76 tonnes last year. This indicates that the Reserve Bank of India (RBI) is betting on the long-term stability of gold compared to U.S. debt securities.
Gold acts as a safe-haven asset, especially during inflationary periods and when currencies face volatility.
Impact on India’s Forex Reserves
With over $640 billion in forex reserves, India remains one of the top holders globally. However, the share of U.S. Treasuries is decreasing, while gold’s share is steadily rising.
This move strengthens India’s financial resilience and reduces dependence on the dollar.
For more details on global forex trends, check IMF’s official data.
Why Gold Over US Treasuries?
- Gold offers inflation protection
- Acts as a hedge against currency fluctuations
- Less vulnerable to U.S. fiscal or political instability
Experts believe this shift is a part of a broader global trend where countries diversify their forex portfolios.
Global Implications
If more countries follow the “India reduces US Treasury holdings” strategy, demand for U.S. debt could drop, impacting interest rates. Meanwhile, gold prices may rise as central banks continue to accumulate the precious metal.
FAQs
Why is India reducing its US Treasury holdings?
India aims to diversify its forex reserves and reduce exposure to US dollar risks.
How much gold does India have in its reserves?
India’s gold reserves have reached approximately 879.98 metric tonnes in 2025.
What is the total size of India’s forex reserves?
India’s forex reserves currently stand at over $640 billion.
Why is gold preferred over US Treasuries?
Gold acts as a safe-haven asset, offering stability during economic uncertainties and currency fluctuations.
