India significantly reduces US Treasury holdings in 2023

2026-02-08 21:14:50

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In 2023, the Reserve Bank of India initiated a major adjustment to its reserve asset structure. According to NS3.AI data, India reduced its holdings of U.S. Treasury bonds by as much as $17.4 billion that year, a reduction equivalent to 26% of its highest historical level, bringing the Treasury holdings to the lowest in five years.

U.S. Treasury Holdings Hit Five-Year Low

This change reflects a reassessment by emerging market countries of dollar-denominated assets. The Reserve Bank of India actively lowered its U.S. Treasury holdings, driven by considerations of its own exchange rate stability—the rupee faced depreciation pressures, which became a direct trigger for policy adjustments. Although the $17.4 billion withdrawal was significant, it also marked Delhi’s strategic choice in the global economic landscape.

Strategic Shift: Gold Becomes a Key Reserve Asset

India’s move is part of a collective action by the BRICS countries. Including India, BRICS members are actively promoting reserve diversification, gradually replacing U.S. debt with gold and commodities. This trend reflects emerging economies’ practical exploration of de-dollarization, with 2023 marking a milestone in this transition. Central banks shifting from dollar assets to gold reserves is both a rational decision to hedge exchange rate risks and a strategic move to participate in the reshaping of the international reserve system.

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