Rupee becomes only Asian currency to gain in month of sweeping losses

India’s rupee is the only currency in Asia to strengthen amid this month’s rout in risk assets, thanks to a spree of share-sale offers that are luring foreign investors.

The rupee has advanced 1.3% in March, boosted by $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 ($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 $600 billion have put India in a strong position to ward off the impact of the U.S. 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 are due to “the huge line-up of IPOs, and possible robust foreign interest,” she said.

State-run companies raising dollar loans worth more than $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.