The rupee has been trading steadily amid an improved outlook ahead of elections in September or October after briefly being pushed by the toppling of the nationalist-led coalition government in April to an eight month low of 43.10 per dollar.

The average forecast of the 26 banks, corporates and consultants surveyed showed the rupee easing from Monday's levels of around 42.7250/7300 to 44.12 by end-March 2000.

In a March poll, the rupee was seen dropping as much as four per cent, to 44.52 per dollar, by March 2000. Some analysts and traders were not surprised by the revised outlook.

Central bank controls on the rupee, which is only convertible on the current account, were mostly responsible for the more stable outlook, traders said. And central bank curbs on inter-bank positions and import booking, imposed afterthe rupee fell to a record low of 43.70 in August, have killed speculation.

"The rupee's behaviour has been better than expected. With all the bad news out of the way, the future is not that bleak," said Sunil Sharma, head of forex trading at ANZ Grindlays."Until the elections, the rupee may not be allowed to fall too much," he added. The market perceived that there would be little change to the thrust of reform by a change in government, senior vice president of IDBI Bank's treasury department S. Anand told Reuters Television.

Despite the fall of the Bharatiya Janata Party-led coalition, foreign funds have pumped in over $250 million into India as part of an Asia-wide buying spree.

But some bears felt optimism in the rupee was overdone and corporates have also been selling dollars. "I think the market is stretching it a bit too far. Based on current stability, they are giving the benefit of doubt to the rupee," said a treasury economist with a foreign bank.