The rupee has advanced 1.3% in March, boosted by US$2.4 billion of overseas purchases of local stocks, including inflows related to initial public offerings.

Nine share-sale offers worth about 59 billion rupees (US$813 million) this month would have added to one of the highest inflows into 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 US$600 billion have put India in a strong position to ward off the impact of the US Treasury-led selloff that’s roiled global risk assets.

“The rupee has had a decent year so far in the EMFX space, with March being an outlier,” said Madhavi Arora, lead economist at Emkay Global in Mumbai.

A large part of the currency’s gains is due to “the huge line-up of IPOs, and possible robust foreign interest,” she said.

State-run companies raising dollar loans worth more than US$1 billion in March, and the central bank tolerating gains, as opposed to its preference for a weaker currency until a few months ago, have also boosted the currency’s appeal.

Still, not all are bullish. Sajal Gupta, head of foreign-exchange and rates trading at Edelweiss Securities Pvt expects the rupee to come under pressure as it runs into a seasonally weak period in May and June.

He predicts the currency will weaken to 74 per dollar by the end of June, from Thursday’s close of 72.5275.