Don't wait for the gold option.

"The Reserve Bank of India (RBI)...denied a Bloomberg News report that said the central bank likely sold gold reserves worth roughly $12 billion in the two weeks through May 22. The RBI said in a statement its physical stock of the precious metal remains unchanged at 880.52 tonnes." "The country's foreign exchange reserves fell to a more than one-year low of $681.4 billion in the week ended May 22, from $688.89 billion a week earlier." "The $7.5 billion decline was largely due to a $4.5 billion fall in the value of the central bank's gold holdings, week-on-week." Reuters. Since January 2025, there was a "worrying trend of slowing inflows on the capital account side, particularly the sharp deceleration in net FDI - this was making the exchange rate stabilisation harder for the RBI despite massive interventions in both spot an forward markets." "But the central bank isn't rushing through any capital account measure - it feels the economy's fundamentals are strong, the rupee is not overvalued and Fx reserves are enough to contain short term valoatility. And raising interest rate is the Monetary Policy Committee's call." FE. Economists at HSBC expect India's balance of payments deficit to widen to $65 billion in 2026-27 from an estimated $35 billion in 2025-26 due to higher oil prices and persistent foreign selling of Indian stocks. In response, "India has raised import tariffs on gold and silver to 15% from 6% in May." Reuters. Also, Prime Minister Narendra Modi urged people to work from home and use public transport to save fuel, postpone purchase of gold, refrain from foreign travel and consume less cooking oil. Reuters. "India's central bank faces one of the toughest interest rate calls in recent memory this week, as the Middle East energy shock, a slumping currency and a weak monsoon risk both crimping growth and stoking inflation." However, "Nearly 80% of 56 economists in a Reuters poll expect the central bank to keep the repo rate unchanged at 5.25%." ET. During the tenure of the former Governor of the RBI Shaktikanta Das, from 12 December 2018 to 10 December 2024 (wikipedia), consumer price index (CPI) inflation surged above the government mandate of 4% (India Today), to well over 6% from December 2019, gradually falling to around 5% from August 2023 (rateinflation,com). CPI inflation fell to its lowest level of 1.17% in December 2025. "For much of the final two years of Das' tenure, the central bank appeared to be winning one of its toughest battles." "By the time Das left office, policymakers were once again discussing growth, liquidity and rate cuts rather than emergency inflation-fighting measures." ET. In fact, Mr Das did nothing from May 2020 to May 2022, holding the interest rate at 4%, and raising it by 40 basis points (bps) from 4% to 4.40% in an emergency meeting of the MPC, just ahead of the US Federal Reserve meeting. Forbes. The rate of inflation appeared to be falling because of base effect and weaker consumer spending. CPI inflation increased to 3.48% in April 2026 from 2.74% in January, while wholesale prices surged by 8.3%, "fuel and power inflation has surged nearly 25% and food inflation has started edging up again. Since costly fuel will increase transport prices, CPI inflation will follow. The RBI is expected to keep its interest rate unchanged at 5.25% at its ongoing meeting. But, "Cleveland Federal Reserve President Beth Hammack said...the US central bank may need to raise interest rates soon should already-high inflation pressures continue to mount." Reuters. At the moment the US interest rate is at 3.50%-3.75%. Raising it by 25 bps to 3.75%-4% will reduce the spread with the RBI's rate to just 125 bps which may see renewed selling by foreign funds. The rupee could plunge and a weaker rupee will increase the price of imports and renew a surge in inflation. The RBI should concentrate on inflation and the rupee, since both are linked, and leave economic growth to the government. Else, it will have to sell its gold. Indians sell gold only in a dire emergency. RBI shouldn't wait that long.