Rupee fair value at 58/$

The fair value of the rupee is about Rs. 58 per dollar. "At a spot price of 64/$, the rupee is fundamentally undervalued by 10%," said Gunit Chadha, co-chief executive officer, Asia Pacific, Deutsche Bank.

Only last week, Deutsche Bank had come out with a research report that said the rupee might touch 70/$ in September. "The market volatility can sometimes overshoot the fundamental value of a currency. But over 9-12 months, as market responses become more mature, we see the rupee inching back to the late-50s, early-60s," added Chadha, a film buff who says he doesn't miss a single Bollywood movie.

Despite the all-round pessimism about the Indian economy, Deutsche Bank is cautiously confident that it will bounce back.

"Let's not hid all the good under the bad. We shouldn't extrapolate the currency market silde over the last three months on to the entire Indian economy over the next three years," Chadha said.

Global growth, he said, will pick up this year from 2.8% to 3.8%, led by economic recovery in the US and better performance by Europe and Japan. "The rupee depreciation will provide Indian exporters sufficient competitive headroom to benefit from growth in these markets," he said.

"And I'm certain that once the recent structural, administrative and monetary measures announced by the government begin to take effect and more reforms follow around supply-side issues, Corporate India will regain confidence. The government must focus on growth and lower the overall cost of doing business; the rest will follow," the Deutsche Bank Apac co-head said.

Although Chadha admitted that fewer MNCs now talk of entering India, the country remains a good place to build a long-term business. "Notwithstanding the short-term headwinds, please remember: we invested Rs. 1,000 crore in our Indian operations in 2012, when the Indian economy was passing through an even more  challenging period," Chadha added.