India’s central bank offloaded $12 billion in gold reserves to support foreign exchange reserves strained by rising crude prices and a weakening currency.
India’s Reserve Bank of India likely sold $12 billion in gold over two weeks ending May 22 to stabilize foreign exchange reserves. The move follows pressure from elevated oil prices and a depreciating rupee, which hit a record low on May 20 before partially recovering.
During the same period, the RBI added $7.5 billion to foreign currency assets, while gold holdings declined despite higher import duties on the metal. India, the world’s third-largest crude importer, faces a widening current account deficit due to disruptions in Hormuz and rising energy costs.
The RBI is evaluating further measures, including potential rate hikes and steps to attract dollar inflows from overseas investors. Gold reserves stood at 880.52 metric tonnes as of end-March, with 77% stored domestically, up from 66% six months earlier.