The Indian rupee's fair value is around 80 against the US dollar despite the country's balance of payment challenges and the Reserve Bank of India's (RBI) interventions, Arindam Sandilya, J P Morgan's Head of Emerging Asia local markets strategy said in a Reuters interview.

Key quotes

"India's CAD (current account deficit) is tracking 4% of the GDP, historically a wide number. If left unchecked, this should reflect on the price of the rupee. But things are not left unchecked, and RBI has been managing the rupee.”

"Taking a holistic view on India's forex-relevant BoP position and the RBI, we reckon the fair value of the rupee is around 80."

“JPMorgan's fair value was near 81-82 at the beginning of the current quarter, but the surprising turnaround in equity flows has led it to reassess its fair value to near 80.”

He said that the rupee's valuations remained "a little rich" relative other emerging markets (EM) currencies and short rupee positions had potentially "have more runway".

• USD/INR Price Analysis: Aims to recapture all-time-highs at 80.20