India, China, Brazil, and Saudi Arabia Reduce Investments in US Treasury Bonds; Gold Gains Favor

In recent years, central banks—including the Reserve Bank of India (RBI)—have been actively increasing gold reserves while simultaneously reducing their holdings in US Treasury bonds. Policy changes under US President Donald Trump have also prompted several countries to rethink their foreign reserve strategies.

RBI Cuts US Treasury Exposure

New Delhi: The RBI’s investment in US Treasury bonds has fallen below $200 billion. According to a report by Economic Times, India is not alone—several other nations have also reduced their US Treasury holdings. As of October 2025, the RBI held $190 billion in US Treasuries, $50.7 billion less than the same period last year. Meanwhile, the RBI increased its gold reserves, signaling a strategic shift in managing foreign exchange reserves.

As per RBI data, the central bank’s gold holdings rose to 880.18 metric tons by October 2025, up from 866.8 metric tons a year earlier. During the same period, India’s total foreign exchange reserves remained steady at around $685 billion.

Global Trends in Treasury Investments

Data shows that while countries like the United Kingdom, Belgium, Japan, France, Canada, and UAE increased their investments in US Treasuries, China, Brazil, India, Hong Kong, and Saudi Arabia reduced theirs year-on-year.

Gold as a Safe Haven

Gold’s share in RBI’s foreign reserves rose to 13.6% by September 26, compared to 9.3% a year ago, when reserves were at record levels. Globally, central banks are adding gold to their portfolios despite rising prices, treating it as a safe-haven investment during times of economic uncertainty. The Russia-Ukraine war accelerated this trend, prompting central banks to reduce dependency on the US dollar and increase gold holdings.

Expert View

Goura Sengupta, Chief Economist at IDFC First Bank, noted, “India’s reduced exposure to US Treasury bills reflects the RBI’s attempt to diversify its foreign exchange reserves by increasing gold holdings. Rising financial pressures in developed countries have driven up global bond yields, increasing the risk of valuation losses on Treasury holdings. To mitigate this, central banks—including the RBI—are shifting part of their reserves from US Treasuries to gold.”

Largest Treasury Holders

As of October 2025, total investments by central banks in US Treasury bills stood at $9.24 trillion. Japan remained the largest holder at $1.2 trillion, followed by the UK ($877 billion) and China ($688.7 billion), down from $760.1 billion the previous year. Meanwhile, Brazil’s holdings fell from $228.8 billion to $167.7 billion during the same period.