Despite concerns over crude oil prices, foreign investor outflows and currency weakness, DSP Mutual Fund believes the current environment presents an attractive opportunity to allocate to rupee-denominated assets across equities and bonds.
In a recent note titled “This Is The Time To Buy Rupee Assets, Not Bet Against Them,” the fund house highlighted five major reasons why it believes that currencies, interest rates, and flows are inherently cyclical. Betting against the rupee at these depressed REER levels and tight inflation differentials is a low-probability trade. Conversely, the data suggests it is time to allocate towards rupee-denominated assets across both equities and bonds.
