DSP Mutual Fund has urged investors to allocate towards rupee-denominated assets despite concerns over crude oil prices, currency weakness and foreign outflows. The fund house cited undervalued REER levels, narrowing India-US inflation differentials, resilient external sector buffers, attractive largecap valuations and cyclical forex trends as key reasons favouring Indian equities and bonds.

DSP Mutual Fund has urged investors to allocate towards rupee-denominated assets despite concerns over crude oil prices, currency weakness and foreign outflows. The fund house…

On a trade-weighted basis, the rupee is fundamentally undervalued, creating a strong margin of safety for investors, the report says.