Why Analysts Believe RBI May Have Quietly Offloaded Gold Worth $12 Billion
June 02, 2026
Bloomberg Economics estimates the RBI may have sold $12 billion worth of gold to strengthen forex reserves amid oil shocks and rupee pressure., Economy, Times Now
Reserve Bank of India (Image Source: iStock)
The Reserve Bank of India may have quietly pared back a portion of its gold holdings in recent weeks as it sought to protect the country’s foreign-exchange reserves from the economic fallout of the ongoing conflict in the Middle East, according to an analysis by Bloomberg Economics. Abhishek Gupta, Senior India Economist at Bloomberg Economics, estimates that the Reserve Bank of India (RBI) sold approximately $12 billion worth of gold in the two weeks leading up to May 22.
During the same period, the central bank is believed to have added around $7.5 billion in foreign-currency assets.
The assessment is based on publicly available reserve data and comes despite a recent increase in import duties on gold. Normally, higher duties would be expected to support the valuation of the RBI’s gold holdings as well as its dollar assets. The apparent decline in reserves, therefore, points toward active gold sales by the central bank, Gupta suggested in the report.
The analysis shows growing concerns among policymakers over the strain on India’s external finances. Persistent capital outflows, rising crude oil prices, and disruptions linked to the Iran conflict and the effective closure of the Strait of Hormuz have increased pressure on the country’s balance of payments.
At the same time, a widening current-account deficit has weighed on the rupee, prompting authorities to focus on maintaining adequate levels of liquid foreign-currency reserves. In such an environment, foreign-currency assets can provide greater flexibility for intervention in currency markets than gold holdings.
According to earlier reports by Bloomberg News, RBI Governor Sanjay Malhotra is evaluating a range of options to stabilise the rupee. These include a potential increase in interest rates as well as efforts to attract additional dollar inflows from overseas investors.
Rupee Under Pressure Amid Rising Energy Costs
India’s dependence on imported crude oil has made it particularly vulnerable to the ongoing turmoil in the Middle East. As the world’s third-largest oil importer, the country has faced a growing foreign-currency burden as higher energy prices increase import costs.
The RBI’s actions in the foreign-exchange market appear to have provided some support. Since touching a record low on May 20, the rupee has outperformed several regional peers. However, the currency remained under pressure, trading 0.2 per cent lower at 95.17 against the US dollar on Tuesday.
The government has also introduced measures aimed at reducing external vulnerabilities. These include increases in fuel prices and a significant hike in import duties on precious metals. Additional steps to support the rupee are expected in the coming days.
Gupta believes the RBI is likely to resume building its foreign-currency reserves whenever market conditions become more favourable. “Periods of dollar weakness, renewed foreign-capital inflows, or lower oil prices would create opportunities to add to foreign-currency assets,” he wrote, as per the report.
The central bank’s reserve composition has also undergone notable changes. As of the end of March, the RBI held 880.52 metric tons of gold, with 77 per cent stored within India. Six months earlier, only 66 per cent of the country’s gold reserves were held domestically.
According to the RBI’s half-yearly foreign exchange report released in April, most of the remaining overseas gold is held with the Bank of England and the Bank for International Settlements.
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The Reserve Bank of India may have quietly pared back a portion of its gold holdings in recent weeks as it sought to protect the country’s foreign-exchange reserves from the economic fallout of the ongoing conflict in the Middle East, according to an analysis by Bloomberg Economics. Abhishek Gupta, Senior India Economist at Bloomberg Economics, estimates that the Reserve Bank of India (RBI) sold approximately $12 billion worth of gold in the two weeks leading up to May 22.
During the same period, the central bank is believed to have added around $7.5 billion in foreign-currency assets.
The assessment is based on publicly available reserve data and comes despite a recent increase in import duties on gold. Normally, higher duties would be expected to support the valuation of the RBI’s gold holdings as well as its dollar assets. The apparent decline in reserves, therefore, points toward active gold sales by the central bank, Gupta suggested in the report.
The analysis shows growing concerns among policymakers over the strain on India’s external finances. Persistent capital outflows, rising crude oil prices, and disruptions linked to the Iran conflict and the effective closure of the Strait of Hormuz have increased pressure on the country’s balance of payments.
At the same time, a widening current-account deficit has weighed on the rupee, prompting authorities to focus on maintaining adequate levels of liquid foreign-currency reserves. In such an environment, foreign-currency assets can provide greater flexibility for intervention in currency markets than gold holdings.
According to earlier reports by Bloomberg News, RBI Governor Sanjay Malhotra is evaluating a range of options to stabilise the rupee. These include a potential increase in interest rates as well as efforts to attract additional dollar inflows from overseas investors.
Rupee Under Pressure Amid Rising Energy Costs
India’s dependence on imported crude oil has made it particularly vulnerable to the ongoing turmoil in the Middle East. As the world’s third-largest oil importer, the country has faced a growing foreign-currency burden as higher energy prices increase import costs.
The RBI’s actions in the foreign-exchange market appear to have provided some support. Since touching a record low on May 20, the rupee has outperformed several regional peers. However, the currency remained under pressure, trading 0.2 per cent lower at 95.17 against the US dollar on Tuesday.
The government has also introduced measures aimed at reducing external vulnerabilities. These include increases in fuel prices and a significant hike in import duties on precious metals. Additional steps to support the rupee are expected in the coming days.
Gupta believes the RBI is likely to resume building its foreign-currency reserves whenever market conditions become more favourable. “Periods of dollar weakness, renewed foreign-capital inflows, or lower oil prices would create opportunities to add to foreign-currency assets,” he wrote, as per the report.
The central bank’s reserve composition has also undergone notable changes. As of the end of March, the RBI held 880.52 metric tons of gold, with 77 per cent stored within India. Six months earlier, only 66 per cent of the country’s gold reserves were held domestically.
According to the RBI’s half-yearly foreign exchange report released in April, most of the remaining overseas gold is held with the Bank of England and the Bank for International Settlements.
Get Latest News Live on Times Now along with Breaking News and Top Headlines from Business, Economy and around the World.
Latest News
Priya Raghuvanshi author
She is working as a Chief Copy Editor at Times Now’s Business Desk, where she covers key developments in the stock market, Indian corporates across se ... View More
News
Business
Economy
End of Article