Daijiworld Media Network - Mumbai
Mumbai, Jan 10: In a move seen as a strategic shift towards diversification of foreign exchange reserves and a reduced dependence on dollar-denominated assets amid rising global economic and geopolitical uncertainties, the Reserve Bank of India (RBI) has slashed its holdings of US Treasury securities by 21 per cent over the past year.
Data released by the US Department of Treasury shows that RBI’s investment in US bonds declined sharply from $241.4 billion on October 31, 2024 to $190.7 billion as of October 31, 2025. The reduction indicates a recalibration of India’s forex strategy with a greater focus on asset diversification.
The United States follows an October–September fiscal year.
According to a Bloomberg analysis, this marks the first annual decline in RBI’s US Treasury investments in the last four years. The drawdown comes despite relatively attractive yields on US government bonds, with the benchmark 10-year Treasury yield trading in the range of 4 to 4.8 per cent during the period.
Experts believe the reduction is not yield-driven but reflects a broader reassessment of reserve allocation. India’s foreign exchange reserves stood at around $700 billion in October.
As part of its diversification efforts, the RBI has been steadily increasing its exposure to gold. After purchasing a record 64 tonnes of gold in 2024, the central bank slowed its direct gold buying in 2025. As of September-end, India’s gold reserves stood at 880.8 tonnes.
Gold’s share in total foreign exchange reserves rose sharply to 13.9 per cent by September, compared to 9 per cent in the corresponding period last year. While RBI made modest direct purchases of about 4 tonnes of gold till September 2025, it significantly boosted domestically held reserves by repatriating nearly 64 tonnes of gold from overseas vaults.
China also trimmed its US Treasury exposure during the year, reducing its holdings by 9.3 per cent to $688.7 billion, reflecting a broader global trend among major economies to rebalance reserve portfolios.