Still, it is not expected to gain much strength and will likely trade around 63.00 rupees to the US dollar by the end of April before rising slightly to 62.30 in a year, according to a poll of 29 currency strategists conducted this week.
Those predictions are not far from Thursday's spot rate of 62.40 and are indicative of the uphill climb policymakers face to help the rupee claw back some of last year's losses - when it fell 11 percent against the dollar and hit record lows.
Last month, in a repeat of mid-2013, investors battered emerging market currencies from Turkey to South Africa on concerns the US Federal Reserve will continue to gradually unwind its stimulus programme and amid fears of slowing global growth.
"The Fed's taper was a convenient excuse to sell off. It wasn't the catalytic trigger," said Vishnu Varathan, economist at Mizuho Corporate Bank in Singapore.
Varathan refers to falling U.S. treasury yields, arguing that if concerns about the Fed reducing its $75 billion a month stimulus was what caused the emerging market sell off in January, U.S. bond yields should have gone up like last summer.
The benchmark 10 year U.S. treasury yield dipped around 30 basis points in the second half of last month, a stark contrast to its 80 percent rise between May and December 2013.
A Reuters poll on Wednesday showed the Turkish lira and South African rand, among the biggest losers in last month's rout, were the most vulnerable in the event markets started dumping emerging market currencies again.
The rupee, however, managed to emerge largely unscathed due to measures taken to curb the import of gold, a key item bloating India's current account, which narrowed to $5.2 billion, or 1.2 percent of GDP, in the quarter to September. That is the lowest in over four years.
"The big question is whether the clamp down in gold imports, which helped reduce the current account deficit dramatically, can be sustained for two more quarters," said Varathan.
"If it can, then the rupee could get bumped up this year especially if a non-fractured government assumes power after the elections."
India goes to elections by May and the outcome is seen by analysts as a key factor that will likely influence investor confidence in Asia's third-largest economy.
Expectations for growth in 2014 have improved as well after data this week showed factory activity expanded in January at its fastest pace in nearly a year.
MODEST YUAN APPRECIATION
Despite concerns about China's cooling economic growth, its yuan currency is seen gaining strength over the course of the year on expectations the central bank will gradually widen the currency's trading band.
The poll showed it is expected to trade at 6.04 by April, 6.00 by July and 5.96 by January 2015, a modest rise from the 6.06 it closed at on Jan 30.
"Since exports have underperformed the People's Bank of China is unlikely to risk too much appreciation in the yuan particularly at a time when other emerging currencies are not performing well," added Varathan.
China is in the midst of an experiment to reposition its economy in such a way that growth is derived more from consumer demand rather than exports.