The Indian rupee’s free-fall continued on Tuesday, now down 22% against the dollar since January. So is it a good buying opportunity?
Sort of, according to Mark Mobius, chairman of Templeton Emerging Markets Group.
In comments heavy on qualifiers, the emerging and frontier market expert told India’s CNBC-TV18 that “I think the worst is over. The currency has moved probably too far and we have a situation where there could be a pullback on the currency.”
He argued a combination of hedge funds and other derivative instruments have played a big role in the rupee’s dramatic decline, and that it’s “probably over.”
The subcontinent’s currency has accelerated since June when the U.S. Federal Reserve announced it was considering tapering its monthly bond-buying program, which has helped boost emerging markets and their currencies.
CNBC-TV18 noted the decline has left members of India’s government scratching their heads as to how to stop the rout. In a move screaming “move along, nothing to see here,” Prime Minister Manmohan Singh tried to put a positive spin on the situation, telling parliament the rupee’s fall in value was part of “a needed adjustment that would make Asia’s third-largest economy more competitive.”