SBI Conclave 2026: RBI DG sees case for rupee recovery after sharp correction

Reserve Bank of India (RBI) Deputy Governor Poonam Gupta suggests that the Indian financial markets, including the rupee, may recover from recent underperformance. Factors contributing to this potential improvement include reduced dependence on imported crude oil, economic growth, a more favorable capital account, and a decreasing current account deficit (CAD).

Gupta believes the rupee's sharp depreciation over the past year and a half may have been an overcorrection. She also anticipates that the rupee could stabilize or even appreciate, contradicting previous market expectations. Meanwhile, SEBI is considering longer-tenure derivatives products to enhance investor participation. RBI's Deputy Governor emphasizes the need to balance lending and growth, cautioning against excessive credit during a period of surplus liquidity in the banking system.