- India, a BRICS member, has sold $174 billion of US Treasury bonds to support its weakening rupee.
- The country’s US bond reserves have plunged to a five-year low, now making up only one-third of its foreign exchange assets.
- This historic sell-off is part of a broader BRICS shift toward holding more Gold and moving away from the US dollar.
In a decisive move to bolster its national currency, BRICS member India has offloaded a historic $174 billion in US Treasury bonds, according to data from the Reserve Bank of India. Consequently, its holdings have fallen to their lowest point in five years, down 26% from a 2023 peak. Meanwhile, this US debt now accounts for just a third of the nation’s Forex assets, marking a 40% decline from the previous year.
India is channeling these funds into accumulating gold, joining other emerging economies in diversifying central bank reserves. This strategic pivot aims to provide direct support for the rupee against a dominant US dollar. The global bond market is consequently experiencing a significant paradigm shift toward commodities and local currencies.
BRICS nations like India, Russia, and China have been routinely reducing their US Treasury exposure. Analyst Michael Brown confirmed “The trend is very much embedded at this point.” Chief Economist Win Thin also stressed that “There is still room for India to lighten up its US Treasury holdings.”
Even a potential US-India trade deal is unlikely to reverse this established strategy. Brown noted such an agreement would merely stabilize, not increase, Indian bond purchases. Finance Minister Nirmala Sitharaman has already hailed the central bank’s actions as a “very considered decision” to diversify.
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