New Delhi, May 28 -- The Indian rupee's sharp weakness this year has triggered growing anxiety across financial markets. Foreign investors have continued to pull money out of Indian equities, crude oil prices remain elevated, and concerns around the country's balance of payments have intensified after the rupee crossed the 96 mark against the U.S. dollar. For many investors, the instinctive reaction has been to look outward - toward dollar assets, gold or overseas markets.

But DSP Mutual Fund is making a contrarian call.

In a recent note titled "This Is The Time To Buy Rupee Assets, Not Bet Against Them," DSP argued that several macroeconomic indicators suggest the rupee may actually be significantly undervalued at current levels and th...