Rupee rally may be short-lived as elections, oil price risks loom

Elections, fiscal slippage, inflation bottoming and risk of oil prices picking up closer to $70 a barrel in May if Iran crude waiver expires remain key risks

India’s rupee has snapped out of its recent doldrums, thanks to the easing in the military skirmishes with Pakistan and strong foreign flows into the nation’s shares. Analysts aren’t sure if the gains will sustain with elections due by May.

The currency has rebounded about 2 per cent since early February, and is no longer the worst performer this year among Asia’s emerging market currencies -- a tag it held as recent as last week when tensions between India and Pakistan briefly reached the highest point since a 1971 war.

The flare up settled just as global funds warmed up to local