# Why rupee weakens despite narrower current account deficit

> Rupee expected to weaken further as global conditions tighten.
- Title: Why rupee weakens despite narrower current account deficit
- Summary: Rupee expected to weaken further as global conditions tighten. The Indian rupee is projected to depreciate further despite a narrower current account deficit…
- Keywords: rupee, current account deficit, reserve bank of india, foreign portfolio outflows, brent crude prices, oil import bill, money, business, weakens, despite, narrower, current
- Source: The Economic Times — https://economictimes.indiatimes.com/markets/forex/rupee-to-weaken-further-despite-narrower-current-account-deficit/articleshow/135079049.cms
- Author: Rozebud Gonsalves
- Published: 2026-10-21T01:01:00+00:00
- Read time: 1 min
- Topics: rupee, current account deficit, reserve bank of india, foreign portfolio outflows, brent crude prices, oil import bill, money, business
## Rupee depreciates 5% this year
The Indian rupee has depreciated 5% this calendar year despite narrower current account deficit.
## Global financial conditions tighten
Tighter global financial conditions and persistent foreign portfolio outflows pressure the rupee.
## RBI intervention insufficient
Sustained Reserve Bank of India intervention cannot bridge the gap with external pressures.
## Current account deficit narrows
Current account deficit contracted to 0.5% of GDP from 2.5% three years ago.
## Indonesian rupiah weakest in Asia
Indonesian rupiah fell 7.3% while South Korean won gained 8.5% this year.
## Oil prices impact rupee
Higher oil import costs from Brent crude near $105 per barrel weaken the rupee.
## RBI measures to curb outflows
RBI introduced special window for oil companies and tightened forex derivatives rules.
## Key takeaway

The Indian rupee is projected to depreciate further despite a narrower current account deficit due to global financial pressures and oil prices.