The Reserve Bank of India moved swiftly on Wednesday to reject reports that it had sold part of the country’s gold reserves in an attempt to steady the rupee, stepping into a debate that had gathered pace after a Bloomberg Economics report suggested the central bank may have offloaded bullion worth nearly $12 billion during recent weeks of market pressure.
In a formal statement issued from Mumbai, the RBI said media reports claiming it had sold physical gold reserves were “not correct” and clarified that the stock of gold held by the central bank remained unchanged at 880.52 tonnes. The statement, brief but direct, sought to close down speculation that India’s monetary authority had begun liquidating bullion to protect foreign currency reserves at a time of rising oil prices, capital outflows and pressure on the rupee.
The denial came after Bloomberg Economics published an analysis by economist Abhishek Gupta, who argued that publicly available reserve data suggested the RBI had likely reduced part of its gold holdings while increasing foreign currency assets during the two weeks ending May 22. The report linked the alleged move to the wider strain on India’s external position caused by conflict in West Asia and disruptions around the Strait of Hormuz, one of the world’s busiest oil shipping routes.
India, which imports most of its crude oil needs, has faced mounting pressure from rising energy costs in recent weeks. The rupee has weakened sharply during that period, touching record lows against the US dollar before recovering some ground after central bank action in currency markets. Against that backdrop, the suggestion that the RBI had turned to its gold reserves quickly drew attention from traders, economists and political commentators alike.
The central bank’s response left little room for ambiguity. It stated that the physical stock of gold, disclosed regularly through the RBI’s Monthly Bulletin, remained unchanged and urged the public to rely on official releases rather than speculation appearing in sections of the media.
The Press Information Bureau’s Fact Check unit also intervened publicly. In a post on X, it labelled the claim “fake” and pointed to RBI data showing that gold’s share in India’s foreign exchange reserves had risen steadily over recent months rather than falling. According to the figures cited, gold accounted for 13.92 per cent of reserves at the end of September 2025, rose to 16.70 per cent by March 31 this year, and edged further to 16.85 per cent as of May 22.
Gold reserves return to the centre of policy debate
The controversy has once again brought attention to the place of gold in India’s reserve management policy. Over the past several years, the RBI has steadily increased its bullion holdings as many central banks around the world sought to reduce dependence on dollar-denominated assets. Gold, while less liquid than foreign currency reserves, is often viewed by central banks as a store of value during periods of market instability and geopolitical strain.
India’s gold stock has climbed steadily since the pandemic years, with the RBI purchasing large quantities during phases of economic uncertainty and low global interest rates. A growing share of those reserves has also been moved back to India from overseas vaults. According to the RBI’s half-yearly foreign exchange report released in April, around 77 per cent of India’s gold reserves are now held domestically, compared with 66 per cent six months earlier. The remainder is stored mainly with the Bank of England and the Bank for International Settlements.
That movement had already triggered discussion among economists about the RBI’s thinking on reserve safety and accessibility. Wednesday’s dispute added another layer to that discussion, raising questions over how reserve data is interpreted and how quickly assumptions can spread in volatile market conditions.
The Bloomberg Economics report had argued that the RBI may have sold gold to avoid drawing down liquid foreign currency reserves too aggressively during recent currency interventions. Such interventions involve the central bank selling dollars from its reserves to slow excessive depreciation in the rupee. Analysts monitoring reserve numbers had noted changes in valuation and composition, which some interpreted as a sign of bullion sales.
Yet economists familiar with reserve accounting pointed out that fluctuations in reserve values do not automatically mean physical sales have taken place. Gold prices, exchange rates and valuation adjustments can all alter the reported composition of reserves without any movement in actual holdings. The RBI’s statement appeared intended to settle precisely that issue by stating that the physical quantity of gold had not changed.
Pressure on the rupee keeps markets on edge
Even with the clarification, the broader concerns surrounding the rupee and India’s external finances remain firmly in view. The Indian currency has been under pressure from higher crude prices, foreign investor withdrawals and uncertainty across commodity markets tied to tensions in West Asia. Oil prices climbed sharply after fears grew over possible disruptions to shipping through the Strait of Hormuz, through which a large share of the world’s crude supplies pass.
The rupee briefly fell to an all-time low in May before recovering after action by the RBI in foreign exchange markets. Traders say the central bank has been active in smoothing volatility, though officials rarely comment publicly on day-to-day interventions.
Bloomberg Economics had suggested RBI Governor Sanjay Malhotra was weighing several responses, including interest rate measures and attempts to attract dollar inflows from overseas investors. While the RBI did not address those suggestions directly, the episode showed how closely market participants are watching the central bank’s reserve position during a period of external strain.
Currency dealers said Wednesday’s clarification was likely aimed not only at correcting the record but also at reassuring markets that the RBI’s reserve buffer remains intact. Gold reserves carry symbolic weight in India as well as financial importance, and speculation over their use can quickly feed wider anxiety about economic conditions.
