The Indian rupee plunged to a record low of 58.98 per dollar on Tuesday.
The Reserve Bank of India is reported to have intervened and sold U.S. dollars to stem the rupee's decline.
The rupee has fallen about 5.6% against the dollar in the past month.
This is part of the overall selloff in everything related to emerging markets.
But in a report out last week, Deutsche Bank's Taimur Baig and Kaushik Das wrote that the rupee will rally against the greenback in the second half of the year.
"Four times since 2008 there have been instances of fears about the rupee-dollar exchange rate’s disorderly movement," Baig and Das write. "Each time, the episodes were triggered by the rupee heading toward another all-time low against the USD."
In 2008 and 2013 the rupee's depreciated along with other global currencies, while in 2011 and 2012 they were driven by India's "own vulnerabilities."
They base this call on 5 key things 1. Inflation is declining. 2. The current account deficit is "likely to correct substantially." 3. The outlook for inflows is positive. 4. Global risk aversion is likely to ease off. 5. "The rupee is appropriately valued, with both the real and nominal effective exchange rates having corrected considerably in recent years."
Here's a look at how the rupee has traded against the dollar in the past month:
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