Nassim Taleb, author of 'The Black Swan' and 'Antifragile', recently warned that the dollar has lost about 40% of its value against gold in the past two years — a decline worsened by US President Donald Trump's policies. India's reserve strategy appears to echo that concern.
Taleb's social media post follows the Reserve Bank of India's trim in its holdings of US Treasury bills to $227 billion in June 2025 from $242 billion a year earlier, as per an Economic Times report. At the same time, it bought 39.22 metric tonnes of gold, lifting total reserves to 879.98 tonnes from 840.76 tonnes last year.
Past two years, the dollar lost 40% of its value in terms of gold. Trump is exacerbating it. https://t.co/T5VqipyEZu
The timing is significant. Earlier this month, Trump slapped an additional 25% tariff on India for its purchase of Russian crude oil, taking the total levy to 50%.
Still, India remains among the top 20 global investors in US debt, ahead of Saudi Arabia and Germany, with nearly all of its Treasury holdings forming part of its $690 billion in forex reserves as of August 22.
It's not alone in this shift. China, the third-largest holder of US debt after Japan and the UK, cut its stockpile to $756 billion in June 2025, from $780 billion a year earlier.
The dollar will likely depreciate further given that 'America First' can't happen with the dollar at current values, said Anindya Banerjee, head of currency and commodity research at Kotak Securities. He estimates the dollar index to be at $94 this year.
The US dollar index has already tumbled more than 10% in the first six months of the year, its worst first-half performance since 1973, as per a Bloomberg report. Banks and brokers are seeing rising demand for currency products that bypass the dollar, added the report, stating that some of Asia's richest families are cutting exposure to US assets as Trump's tariffs have made the country much less predictable.
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