India’s central bank may have offloaded a portion of its gold holdings to shield its foreign-currency assets from the cascading fallout of the war in the Middle East, according to an analysis by Bloomberg Economics based on publicly available data.
The Reserve Bank of India likely sold gold reserves worth roughly $12 billion in the two weeks through May 22, while buying $7.5 billion of foreign-currency assets, BE’s senior India economist, Abhishek Gupta, wrote. The fall came despite a hike in import duties on the precious metal, which should have boosted the value of the bank’s bullion and dollars. This suggests the RBI was selling gold, according to Gupta.
