MUMBAI: In what may be a strategic shift towards foreign exchange reserve diversification and non-dollar assets amid rising global economic and geopolitical risks, the Reserve Bank of India has cut 21% of its holdings of US Treasury securities.
According to the US Department of Treasury, RBI’s holding of US bonds dropped from $241.4 billion on October 31, 2024 to $190.7 billion on October 31, 2025, marking a shift in forex strategy towards better asset diversification.
The US follows October-September as its fiscal year.
According to a Bloomberg analysis, this is the first annual dip in US treasury investments by RBI in the past four years. The drawdown comes despite relatively attractive yields in US bonds. During the period, the yield on the benchmark 10-year US bonds traded in 4-4.8% range.
Experts say this steep reduction is not driven by yield considerations but by a reassessment of the allocation of reserves, which hovered around $700 billion in October.
As part of diversification, RBI has been building its gold reserves. After a record 64 tonnes of gold buy in 2024, the central bank has been going slow in adding the yellow metal in 2025, which as of September-end stood at 880.8 tonnes. Gold’s share in the total foreign exchange reserves shot up to 13.9% by September, up from 9% in the year-ago period.
In 2025, RBI made only modest direct purchases of gold to the tune of 4 tonnes till September, but significantly increased its domestically held reserves by repatriating over as much as 64 tonnes from overseas vaults.
China, too, reduced its treasury holding by 9.3% to $688.7 billion during the year.