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Fair case for rupee to appreciate from current levels: RBI's Poonam Gupta

RBI Deputy Governor Poonam Gupta sees a case for rupee appreciation as the current account deficit shrinks and capital flows improve, potentially later this financial year.

Anjali Kumari Mumbai 5 min read Last Updated : Sep 23 2026 | 10:45 PM IST

The rupee’s 13 per cent depreciation in the last one year and a half can be seen as a temporary phenomenon and there is a fair case for the Indian currency to not only stabilize but also appreciate from current levels, Reserve Bank of India’s deputy governor Poonam Gupta said on Wednesday.

She expects the current account deficit (CAD) to shrink further, helped by stabilisation in oil prices once the West Asia conflict resolves. Gupta also expects the capital account to turn more favourable later this financial year.

“With the RBI remaining committed to ensuring orderly conditions in the foreign exchange market, and having the wherewithal to meet decades worth of CAD, or the net balance of payment (BOP) deficit, the current market dynamics do not appear especially well-founded,” Gupta said at the SBI Banking and Economics Conclave 2026.

On Wednesday, the rupee reversed its five-day gaining streak to close at 95.75 per dollar, down 0.16 per cent from previous close. The Indian unit has depreciated 0.6 per cent in September.

“If anything, there seems to be a fair case for the rupee to not just stabilize but perhaps even appreciate from the current levels, as was being anticipated by the market analysts when the capital flow measures were first announced,” she said.

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