India's central bank has stated that reports suggesting it is selling gold are "untrue," noting that data shows its physical gold holdings remain unchanged.

The latest figures from the Reserve Bank of India's monthly bulletin indicate that physical gold stocks were stable at 880.52 tonnes in April.

The bank stated in a declaration on Wednesday that gold inventories were maintained at this level as of that date.

Furthermore, a post on the X platform by the Press Information Bureau indicated that gold's share of India's foreign exchange reserves rose to 16.7% as of March 31, up from approximately 14% at the end of September last year.

However, an economic research report released by media on Tuesday estimated that over the two weeks ending May 22, the RBI might have sold gold reserves worth around $12 billion while purchasing $7.5 billion in foreign exchange assets.

The most recent data, as of the end of March, shows that about 77% of the Reserve Bank of India's gold reserves are held domestically, an increase from 66% in September last year.

The clash between this official denial and institutional predictions stems from India's recent battle to defend its currency.

High oil prices, exacerbated by tensions in the Middle East, have led to capital outflows for oil-importing India, with the rupee recently hitting a record low against the US dollar.

Media speculation suggested the central bank was "selling gold for foreign exchange" to replenish US dollar cash for market intervention.

The central bank's swift clarification aims to prevent market misinterpretation of its asset allocation, which could trigger panic in both the rupee and gold markets.

Additionally, the trend of India repatriating nearly 80% of its gold "back home" further underscores the deep-seated considerations of emerging market central banks regarding asset security amid the broader trend of de-dollarization.