Summary of this article
RBI may have sold $12 billion worth of gold in May, according to Bloomberg Economics
The proceeds were likely used to boost foreign currency reserves amid rupee pressure
Higher oil prices and West Asia tensions may have driven the move
The Reserve Bank of India (RBI) may have sold a portion of its gold holdings in May to help protect the country's foreign exchange reserves from the impact of rising tensions in West Asia, according to a Bloomberg Economics report.
Abhishek Gupta, senior India economist at Bloomberg Economics said the RBI is estimated to have sold around $12 billion worth of gold in the two weeks ended May 22 and used part of the proceeds to increase its foreign-currency reserves by about $7.5 billion. Gupta based his analysis on publicly available data. He said the value of the RBI’s gold holdings declined despite an increase in import duties on the precious metal, which would normally have lifted the valuation of its bullion stock. “This suggests the RBI was selling gold,” he wrote in his report.
The reported gold sale comes at a time when India is dealing with higher crude oil prices and continued foreign fund outflows amid US-Iran tensions and disruptions to shipping through the Strait of Hormuz. As India is one of the world’s largest oil importers, rising oil prices increase the country’s import bill, putting pressure on foreign exchange reserves, which, in turn, can weaken the rupee.
The RBI has been actively intervening in the foreign exchange market to limit volatility in the domestic currency. The rupee had recently touched record lows of 96.96 against the dollar before recovering some ground.
According to Bloomberg Economics, the RBI’s actions suggest it is focusing on keeping enough foreign-currency reserves on hand at a time of global uncertainty. Gupta said the central bank is likely to rebuild its foreign exchange reserves when conditions improve, such as when the dollar weakens, foreign investment flows return, or oil prices ease.
As of March 2026, RBI held 880.52 metric tonnes of gold, with 77 per cent of the holdings stored domestically. The share of gold held within India has risen in recent years as several emerging-market central banks reassess the risks associated with keeping reserves overseas following Western sanctions on Russia.
