Rupee set to stabilise and appreciate, says RBI Deputy Governor Poonam Gupta
Synopsis
RBI Deputy Governor Poonam Gupta publicly pushed back against bearish rupee sentiment at the SBI conclave in Mumbai, making a case for appreciation even after a 13.1% cumulative fall since March 2025. With CAD below 1% of GDP, resilient remittances, and new FTAs coming into effect, she argues the central bank has both the tools and the fundamental backing to steady the currency.
Key Takeaways
RBI Deputy Governor Poonam Gupta said there is a fair case for the rupee to stabilise and appreciate from current levels.
The rupee has depreciated 13.1% on a point-to-point basis between 31 March 2025 and 16 September 2026 .
India's CAD has remained below 1% of GDP , supported by strong services exports and remittances.
Negative BOP stood at approximately $5.0 billion in 2024-25 and $23.6 billion in 2025-26 as capital account surplus fell short of CAD.
Gupta flagged declining oil import dependence and the positive impact of recent FTAs as emerging tailwinds for the external account.
Reserve Bank of India (RBI) Deputy Governor Poonam Gupta on 24 September 2026 made a case for the rupee to not only stabilise but potentially appreciate from current levels, citing structural strengths in India's external account. Speaking at the SBI conclave in Mumbai, Gupta acknowledged that the rupee has cumulatively depreciated by 13.1% on a point-to-point basis between 31 March 2025 and 16 September 2026, but argued that prevailing market concerns are not well-founded.
What Gupta Said
'If anything, there seems to be a fair case for the rupee to not just stabilise but perhaps even appreciate from the current levels, as was being anticipated by the market analysts when the capital flow measures were first announced,' Gupta said. She added that the RBI remains committed to ensuring orderly conditions in the foreign exchange market and has 'the wherewithal to meet decades worth of CAD, or the net balance of payment (BOP) deficit.'
India's Current Account: Structural Resilience
Gupta pointed out that India has traditionally run a small current account deficit (CAD) alongside a larger capital account surplus, resulting in a net positive BOP. The CAD as a percentage of GDP has declined over time, lending resilience to the overall balance of payments. She noted that net services exports and remittances remain 'great structural strengths' — together large and resilient enough to absorb the merchandise trade deficit and keep the CAD contained at below 1% of GDP.
Recent shocks in oil and gold prices have temporarily pushed CAD higher. Notably, in the last two years, capital account surplus fell short of CAD, resulting in a negative BOP of approximately $5.0 billion in 2024-25 and $23.6 billion in 2025-26.
Oil Dependence to Fall, Trade Basket Strengthening
Gupta projected that India's dependence on imported oil is set to decline through a combination of alternative energy sources and domestic oil exploration, which would further reduce demand for oil as a percentage of GDP. 'This would be in addition to oil prices themselves stabilising as soon as the conflict resolves,' she noted.
She added that the rest of the trade basket is responding well to new trade opportunities, with the positive impact of recent free trade agreements (FTAs) yet to fully materialise. 'A conducive exchange rate' is expected to support this trend, she said.
What This Means for the Rupee
The CAD is expected to shrink further in coming years, Gupta said, as traditional strengths persist and new ones — including growing success in merchandise exports — emerge. She characterised the current market dynamics around the rupee as not 'especially well-founded,' given the RBI's capacity and India's improving external fundamentals. The remarks signal that the central bank does not view the rupee's recent depreciation as a structural deterioration, even as it monitors the situation closely.
Point of View
Capital outflows have outpaced inflows, which is precisely why market anxiety exists. The Deputy Governor's optimism about FTA-driven export gains and declining oil dependence is structurally sound but medium-term — it does not address the near-term capital account pressure. The real question is whether the RBI's 'wherewithal' translates into active forex intervention or remains rhetorical reassurance.
NationPress
24 Sept 2026
Frequently Asked Questions
What did RBI Deputy Governor Poonam Gupta say about the rupee?
Gupta said there is a fair case for the rupee to not just stabilise but potentially appreciate from current levels, citing India's structural current account strengths and the RBI's capacity to manage forex conditions. She made these remarks at the SBI conclave in Mumbai on 24 September 2026.
By how much has the rupee depreciated recently?
The rupee has cumulatively depreciated by 13.1% on a point-to-point basis between 31 March 2025 and 16 September 2026, according to Poonam Gupta.
Why does Gupta believe the rupee can appreciate?
She pointed to India's CAD remaining below 1% of GDP, resilient net services exports and remittances, the positive impact of recent FTAs, and declining oil import dependence as factors that support a stronger rupee over time.
What is India's current balance of payments situation?
India ran a negative BOP of approximately $5.0 billion in 2024-25 and $23.6 billion in 2025-26, as the capital account surplus fell short of the current account deficit. However, Gupta described the RBI as having sufficient reserves to cover decades of CAD.
How will India reduce its oil import dependence?
According to Gupta, India's oil import bill is set to decline through a shift to alternative energy sources and efforts to develop domestic oil reserves, both of which will reduce oil demand as a share of GDP over time.
