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The rupee strengthened 1.6% to 81.4225 per dollar this month, while the greenback is down about 4.50% after softer-than-expected U.S. inflation data earlier in November fuelled bets of less aggressive Federal Reserve hikes.

The South Korean won , the Singapore dollar , the Malaysian ringgit and the Thai baht have firmed between 3% and 7% this month.

"This is likely reflective of the fact that during the dollar-strength period, the rupee depreciated to a lesser extent compared to other Asian currencies," said Gaura Sen Gupta, India economist at IDFC First Bank.

Moreover, most of the rupee's gains this month came in the earlier half as it treaded a very narrow range in the last two weeks amid strong dollar demand by domestic participants.

Expectations that the dollar's strength and U.S. yields had peaked saw investors return to emerging markets in November. Indian equities were among the biggest beneficiaries as both gauges hit a record high.

However, Sushanta Mohanty, general manager–treasury at Bank of Baroda, said it was "hard to predict" what the rupee would do next month even if cues were positive.

IDFC's Sen Gupta echoed Mohanty's views, saying "in December, the rupee will be caught between a hawkish Fed, seasonal factors and market expectations of rate hikes coming close to the end."

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"We expect depreciation pressures on the rupee to resurface either post the Fed's December meeting or from the start of next year."

Meanwhile, developments in China would continue to be watched closely as any move towards economic reopening would bode well for Asian markets.