The rupee is the only Asian currency to gain in a month of sweeping losses

New Delhi: The Indian rupee is the only currency in Asia that has strengthened amid this month’s decline in risky assets, thanks to a wave of stock offers attracting foreign investors.

The rupee advanced 1.3% in March, buoyed by $ 2.4 billion in overseas purchases of domestic equities, including inflows related to initial public offerings.

Nine stock bids worth 59 billion rupees (US $ 813 million) this month would have added to one of the highest flows to emerging Asia, according to Emkay Global Financial Services Ltd.

The prospect of an economic recovery, a rare current account surplus and foreign exchange reserves approaching $ 600 billion has put India in a strong position to stave off the impact of the US Treasury-led sell-off that has disrupted global risk assets.

“The rupee has had a good year so far in the EMFX space, with March being far from that,” said Madhavi Arora, chief economist at Emkay Global in Mumbai. It said a large part of the currency gains were due to “the huge assortment of initial public offerings and potential strong foreign interests.”

State-run firms raised more than $ 1bn in dollar loans in March, and the central bank also cemented the gains, in contrast to its preference for a weaker currency even a few months ago, the currency’s appeal.

However, not all of them are optimistic. Sajal Gupta, head of forex and pricing at Edelweiss Securities Pvt, expects the rupee to come under pressure as it goes through a seasonally weak period in May and June.

The currency is expected to weaken to 74 against the dollar by the end of June, from Thursday’s close of 72.5275.

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