RBI Bets on US Crash! Dumps $50B in US Treasuries, Gold Reserves Surge to 880 MT

 In a bold shift in foreign exchange strategy, the Reserve Bank of India (RBI) has significantly cut its holdings of US Treasury securities while simultaneously boosting its gold reserves — a move analysts say reflects rising global uncertainty and caution around dollar‑based assets.

 Major Move: Selling Off US Treasury Bonds

According to the latest data from the US Department of Treasury, India’s central bank trimmed its US Treasury holdings from about $241.4 billion in October 2024 to roughly $190.7 billion by the end of October 2025 — a decline of over $50 billion in 12 months. This represents a 21% reduction in RBI’s exposure to US government bonds.

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This is the first annual drop in US Treasury investments in four years, and experts suggest it’s less about predicting a US economic collapse and more about diversifying away from reliance on dollar assets amid rising geopolitical and economic risks.

Gold: India’s New Safe Haven

At the same time, RBI’s gold reserves have jumped to a record ~880 metric tonnes (about 880.18 MT) as of September 2025. This marks an increase of around 25 tonnes in the last year, bringing gold’s share of total foreign exchange reserves to nearly 14%.

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In dollar terms, this bullion now accounts for approximately $95–$108 billion of India’s reserve portfolio, underscoring gold’s role as a safe‑haven asset amid global uncertainty.

 Why This Strategy Matters

This dual shift — selling US Treasuries while increasing gold holdings — is part of a broader trend among central banks around the world that are rebalancing reserves away from dollar instruments and into assets seen as safer amid inflation, currency volatility and geopolitical tensions.

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Here’s what’s driving the RBI’s strategic shift:

• Diversification of risk: With global markets showing increased volatility, gold is viewed as a stable asset that holds value when currencies fluctuate.

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• Hedging against dollar weakness: Despite relatively strong yields on US bonds, central banks are reducing exposure to dollar‑denominated assets.

• Global geopolitical stress: Ongoing tensions and past events, such as asset freezes on some countries’ reserves, have raised caution around reliance on any single reserve currency.

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What Analysts Are Saying

Economists highlight that this doesn’t necessarily signal an imminent US economic crash, but rather illustrates RBI’s risk management and portfolio diversification. Many central banks, including those in China and other emerging markets, have also been increasing gold holdings in recent years.

Moreover, the Indian aptexperiment of bringing more gold home — with over 65% of gold reserves now stored domestically — shows confidence in gold’s role as a strategic asset.

Bottom Line

• 📉 US Treasury holdings down by over $50B

• 🪙 Gold reserves at a record ~880 MT

• 🧠 Strategic pivot toward diversification and safety

This dramatic reshaping of RBI’s reserve mix reflects a global rethinking of risk and asset allocation among central banks. Whether this trend continues — and what it could mean for the US dollar’s long‑standing dominance — will be watched closely by markets worldwide.