The Union Finance Ministry on Wednesday denied media reports that the Reserve Bank of India (RBI) has sold gold worth around USD 12 billion to protect its foreign exchange reserves in the wake of tensions in West Asia and rising import costs. According to the central bank’s latest annual report, India’s gold reserves will increase rather than decline in fiscal 2025-26.
A recent report by Bloomberg Economics senior economist Abhishek Gupta estimated that the Reserve Bank sold about $12 billion worth of gold and bought about $7.5 billion worth of foreign currency assets in the two weeks ended May 22. Reports claimed that the central bank’s move came amid a rise in crude oil prices and a depreciation of the rupee to 95.17 against the dollar on Tuesday due to the Iran conflict and disruptions to shipping through the Strait of Hormuz.
However, the Reserve Bank’s 2025-26 Annual Report refuted this claim. According to official data, the Reserve Bank has a total of 880.52 MT of gold as on March 31, 2026, up by 0.94 MT from 879.58 MT as on March 31. Of this total, 312.32 MT of gold is held as bank property and 820 MT under the department of issue. Gold prices under the banking sector rose to 63.6 per cent this fiscal due to rising gold prices in the global market and weakening of the rupee against the dollar.
India’s overall foreign exchange reserves stood at $691.11 billion as on March 31, 2026 as against $668.33 billion earlier, the report said. At the same time, the value of gold reserves rose to $115.40 billion from $78.18 billion previously. On the other hand, the Reserve Bank has increased its domestic gold reserves as a precautionary measure since the seizure of Western Russian assets. Domestic gold reserves rose to 77 percent at the end of March from 66 percent six months ago, with the rest held abroad, mainly at the Bank of England and the Bank for International Settlements.
As the world’s third largest oil importer, India is currently facing the challenge of rising energy costs due to the crisis in West Asia. To cushion the economic impact, the government has already raised fuel prices and imposed import duties on precious metals. While Reserve Bank Governor Sanjay Malhotra is considering options such as raising interest rates and attracting dollar inflows to maintain currency stability, the central bank’s official accounts reflect India’s strong foreign exchange and gold reserves.