Reserve Bank of India Denies Selling US Treasury Securities

 The Reserve Bank of India (RBI) has denied reports that India sold its holdings of U.S. Treasury securities, with Governor Sanjay Malhotra dismissing speculation over a reduction in the country’s exposure to American government debt.

Speaking at a press conference on Friday following the announcement of the central bank’s monetary policy decision, Malhotra said fluctuations in India’s foreign exchange reserves should not be interpreted as a deliberate divestment of U.S. assets.

“Our foreign exchange reserves have declined, and as a result, the composition of our holdings changes,” he said. “These are daily or weekly fluctuations that we publish regularly. However, there has been no reduction in our holdings of U.S. Treasury securities,” according to Bloomberg.

U.S. government data released in January showed that India’s holdings of long-term U.S. debt fell to $174 billion in November, the lowest level in five years, marking a 26% decline from their 2023 peak. The drop came as the RBI sought to stabilize the Indian rupee amid sustained depreciation pressures.

In October, the central bank pledged to support the domestic currency in a bid to curb speculative activity. Data compiled by Bloomberg showed India’s foreign exchange reserves declined by $10.5 billion during that month. The slide extended into November, with reserves falling to $686.2 billion before rebounding sharply to a record $723.8 billion last week.

India’s reported Treasury sales coincided with a broader repositioning by several major economies away from the world’s largest bond market, amid growing concerns over U.S. fiscal sustainability and what some analysts have described as “American exceptionalism” risks.

Malhotra’s remarks also come against the backdrop of a recent trade development, as U.S. President Donald Trump reduced tariffs on Indian goods from 50% to 18%, signaling a potential easing of bilateral trade tensions.