“I would be inclined to think that the rupee (will) underperform the other emerging market currencies,” said Sameer Goel, Head of Asia Macro Strategy, Deutsche Bank in an interview with CNBC-TV18.

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He elaborated, “...primarily because I feel the possibility of these lockdowns being extended and therefore more materially impacting growth estimates – that probability is still there and that risk needs to be accounted for by the market."

The Indian rupee slumped 18 paise to 73.53 against the US dollar in opening trade on Tuesday tracking weak domestic equities and strong American currency.

“Over the next few weeks, the dollar trend will now be a lot more relevant and I think the broader dollar trend is going to be more dovish in nature and that will give rupee more footing, more ability,” he stated.

“I am surprised as the way the rupee has played out. Mostly so because to our expectations, the rupee should have reacted more to the likelihood, the possibility that we will see a lot of the growth and earnings estimates in India getting downgraded,” he said.

“We have seen relatively the markets being very resilient, seen through what is happening in India at the moment and effectively positioning still for the other side of this COVID wave and the fact that it does not materially hurt the longer-term productive potential or necessarily the appeal of the Indian market,” he added.

For the full interview, watch the video.

(Edited by : Abhishek Jha)

First Published:May 11, 2021 1:05 PM IST