RBI denies selling $12 billion worth of gold; reserves steady at 880 tonne

The Reserve Bank of India (RBI) categorically dismissed media reports on Wednesday (June 3) claiming it had offloaded approximately $12 billion of its gold reserves to defend its foreign-currency assets against the economic fallout of the West Asia conflict. The central bank officially confirmed that its physical stock of gold remains completely unchanged at 880.52 metric tonnes.

RBI’s official response

Moving to quell market speculation, the central bank issued a public statement to shut down the rumors. "The RBI emphasises that these reports are not correct," the central bank said in a statement.

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The institution advised the public to rely strictly on official information it publishes regarding such matters. Simultaneously, the government's Press Information Bureau (PIB) published a fact-check directly debunking the reports of a mass gold sale.

Rising gold reserves

Contrary to claims of liquidation, the RBI's latest annual report reveals that India's physical gold holdings have grown by 0.94 metric tonnes, from 879.58 tonnes on March 31, 2025, to 880.52 tonnes on March 31, 2026. The share of gold in India's broader foreign exchange reserves has been steadily rising, from 13.92 per cent at the end of September 2025 to 16.70 per cent on March 31, 2026, and to 16.85 per cent as of May 22, 2026.

The physical distribution of these assets is split into two departments. Outlining this internal operation, the RBI noted, "Of the 880.52 metric tonnes, 312.32 metric tonnes of gold is held as an asset of the Issue Department as compared to 311.38 metric tonnes as on March 31, 2025". The remaining 568.20 metric tonnes are maintained as an asset of the Banking Department, matching the previous year's volume.

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Explaining the massive surge in this department's overall valuation, the central bank stated, “The value of gold (including gold deposits) held as an asset of Banking Department increased by 63.6 per cent from Rs 4,31,624.80 crore as on March 31, 2025, to Rs 7,06,162.36 crore as on March 31, 2026”. The RBI added the increase was due to an increase in the price of gold and depreciation of INR in relation to USD.

Currency pressures and market interventions

The rumors of the gold sell-off gained traction due to the extreme pressures currently straining the Indian currency. Once considered among the more stable currencies in Asia, the rupee has become one of the worst-performing emerging market currencies this year, pressured by a mix of expensive oil, capital outflows, widening trade deficits and a surging US dollar.

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The rupee has depreciated about 7 per cent so far in 2026 and is down roughly 6 per cent since the outbreak of the Iran conflict in late February. By May 20, 2026, the rupee settled at a record closing low of 96.86 against the USD, dropping 33 paise from its previous close.

To check undue volatility in the rupee's value against the dollar, the RBI typically intervenes in the forex market. Rather than selling gold, the central bank has relied on active dollar sales, which has visibly drained the foreign exchange buffer.

India's forex reserves dropped USD 7.511 billion to USD 681.384 billion during the week ended May 22. The kitty had expanded to an all-time high of USD 728.494 billion during the week ended February 27 this year before the onset of the Middle East conflict that led to several weeks of a drop as the rupee came under pressure and the RBI had to intervene in the forex market through dollar sales.

(With Agency inputs)