Most Asian currencies were trading stronger against the dollar, also pushing the Indian currency higher. The rupee was last trading at 60.04 against its previous close of 60.11.
Dealers say the rupee is likely to remain volatile against the US dollar until the election results are known. Exit polls conducted ahead of May 16, the day of election results may also impact the currency.
The rupee is currently factoring an NDA seat count of 230 seats. Any number that would be significantly lower would see an instant reaction in the rupee. However, dealers also say that the chances of the rupee falling substantially from the current levels is ruled out, given the stronger fundamentals of the Indian economy.
The current account deficit has improved significantly while the RBI has managed to shore up its forex reserves. All this is good news for the Indian rupee.