India Not Selling US Treasuries, RBI Governor Clarifies After Policy Meet

India has not been cutting its holdings of US Treasury securities, Reserve Bank of India Governor Sanjay Malhotra clarified after the latest monetary policy announcement, pushing back against concerns triggered by recent data showing a decline in long-term holdings. 

Governor Clarifies Position on US Treasury Holdings 

Addressing reporters after the policy meeting, the Governor said variations in reported holdings are linked to routine reserve management and currency operations rather than any strategic sell-down. He explained that when foreign exchange reserves move, the composition of assets also shifts accordingly. 

“Our forex reserves had come down, so as a result of that” all holdings change, said Malhotra. “Those are fluctuations on our day-to-day or a week-to-week basis that we give out but there is no reduction in our holdings of US treasuries.” 

Reserve Movements And Data Trend 

As per news reports, official US data released in January showed India’s long-term US Treasury holdings at about $174 billion in November, a five-year low and roughly 26% below the 2023 peak. The change coincided with phases of RBI intervention to manage rupee volatility. 

During that period, the central bank had reiterated its commitment to counter speculative pressure in the currency market.  

Foreign exchange reserves declined by about $10.5 billion in October and continued to soften in November, before rebounding sharply to a record level of $723.8 billion last week after earlier dipping near $686 billion. 

Context Of Global Bond Allocation Shifts 

The moderation in holdings had also come alongside a broader repositioning by some major economies in global bond markets amid debates around US asset valuations and macro outlook.  

The RBI, however, indicated that India’s allocation approach remains driven by reserve management needs rather than directional calls on US government debt. 

Read More: Total Return Swaps to be Introduced by RBI to Deepen Corporate Bond Market! 

Conclusion 

The RBI’s clarification signals continuity in reserve strategy, with reported changes in US Treasury exposure reflecting liquidity and currency operations rather than an active exit from dollar assets. 

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