Jefferies attributed this potential stabilisation (bottoming out) to India’s resilient macroeconomics.
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VIJAY BATE
India’s currency rupee may finally have bottomed out after a persistent weakness, according to Jefferies. In its latest GREED & fear report, the global financial services firm highlighted a “growing likelihood that the rupee has bottomed” following its months-long depreciation.
The Indian currency, Jefferies noted in the report, has been “the worst performer year to date amongst major emerging market currencies,” having declined 3.4 per cent in 2025 to trade near ₹88.7 per US dollar.
“The rupee has bottomed after being the worst performer year to date amongst major emerging market currencies…,” Jefferies’ GREED & fear said, citing its ‘Good news for INR: 20-year low CAD and Improving FDI’ report.
Jefferies attributed this potential stabilisation (bottoming out) to India’s resilient macroeconomics.
It pointed in particular to a current account deficit at a 20-year low of 0.5 per cent of GDP and foreign exchange reserves of $690 billion, sufficient for 11 months of import cover.
The GREED & fear report added that its India strategist has “been assuming, so far correctly, that 89 should mark the bottom for the rupee,” signalling confidence that downside risks have eased.
Separately, in the same report, on Indian equities, it highlighted a year of sharp foreign outflows. Jefferies noted near-record foreign selling of $16.2 billion so far in 2025, resulting in India’s underperformance of 27 percentage points relative to the MSCI Emerging Markets Index.
However, the Jefferies’ report underscores that the domestic investor base has more than offset foreign withdrawals.
Equity mutual funds alone recorded a net inflow of ₹32,100 crore ($3.6 billion) in October and ₹3.7 lakh crore ($42 billion) in the first ten months of 2025. Including other domestic channels, annualised inflows averaged $7.4 billion per month in the first nine months of the year–strong enough to absorb the steady equity supply of $5.7 billion per month.
India’s broader macro outlook remains constructive. Jefferies points to firm credit momentum, with bank credit growth accelerating from 9 per cent year-on-year in May to 11.5 per cent year-on-year by mid-October.
FDI trends also remain encouraging: Gross FDI inflows were up 13 per cent year-on-year to $81 billion in 2024-25, and rose 18 per cent year-on-year in the April-August 2025 period.
Another major thematic highlight of the report was India’s positioning in the global artificial intelligence cycle.
Jefferies describes India as the “reverse AI trade,” meaning that if the global AI rally unwinds, India could outperform while AI-heavy markets face pressure.
“From the standpoint of the global emerging market asset class, it has to be conceded that India has become the reverse AI trade, which is another way of saying it should outperform if the AI trade suddenly unwinds which would be a negative for Taiwan, Korea and China (in that order). These three countries currently account for 61.8 per cent of the MSCI Emerging Markets Index while India accounts for 15.3 per cent,” the report read.
Published on November 16, 2025
