The Indian rupee, one of Asia's worst performing currencies last year, has surged more than 3 percent since February on the back of election hopes. But experts say this "relief rally" is unlikely to last.
Since the start of February, the rupee has gone from levels above 71 against the dollar, to about 69.1 on Wednesday — the strongest level since last August.
That turn in fortunes for India's currency has largely been fueled by optimism in the country's upcoming elections, due to take place over April and May, experts said.
According to a Wednesday note by research firm Capital Economics, the rupee has outperformed all other emerging market currencies this month, in part due to recent opinion polls showing that the ruling Bharatiya Janata Party and current Prime Minister Narendra Modi are on course to win.
"We believe that the Indian rupee has, in the short-term, become a barometer of the Indian elections," Singapore bank DBS also said in a note on Wednesday.