Mumbai: Tracking rising stocks, the rupee on Tuesday surged 37 paise to end at a nine-month high of 59.68 against the dollar on robust foreign capital inflows into equities after exit polls projected BJP-led NDA would form the next government at the Centre.
Weakness of the dollar in the New York market also boosted the rupee that posted its strongest gain against the dollar in two weeks, a forex dealer said.
The BJP-led NDA is projected to form the government at the Centre with exit polls on Monday night giving between 249 and 290 seats to the Narendra Modi-led grouping, which is close to the half-way mark in the 543-member Lok Sabha.
The rupee resumed higher at 59.70 per dollar as against the last closing level of 60.05 at the Interbank Foreign Exchange market.
In line with rising stock market, it firmed up further to a high of 59.59, before ending at 59.68 per dollar. This is a gain of 37 paise or 0.62 per cent from its last close. This is the best gain for the local unit since April 25 when it appreciated by 47 paise.
As per historic data, the rupee had last ended at 59.41 per dollar on July 29, 2013.
Intra-day, the rupee today hovered in a range of 59.59-59.93 per dollar.
As per preliminary stock exchange data, FIIs pumped in a whopping Rs 2,026.23 crore in Indian stocks today.
Banks and exporters preferred to reduce their dollar position on hopes of more foreign capital inflows on the back of strong equity market.
The dollar index was up by 0.23 per cent against the major currencies in the international market.
The Indian benchmark Sensex rose to its all-time level of 24,068.94 before ending at 23,871.23, showing a sharp gain of 320.23 points or 1.36 per cent.
In London, the euro fell to its lowest in a month against the dollar in the early trade.
In New York market, the dollar fell against the British pound yesterday as investors looked ahead to two key UK data reports due Wednesday that could determine if the pound takes another run higher to the USD 1.70 level.
Pramit Brahmbhatt, Veracity Group CEO, said, "Rupee continued to trade positively and appreciated over half per cent for the day as exit polls declared BJP as a clear winner. Investors believe that the Modi and his party will form a business friendly government."
The trading range for the spot USD/INR currency pair is expected to be within 59.30 to 60.30, experts say.
Meanwhile, premium for forward dollar declined further on sustained receipts by exporters.
The benchmark six-month premium payable in October fell to 222.5-224.5 paise from 228-230 paise.
Far forward contracts maturing in April, 2015 also finished lower at 455.5-457.5 paise from 466-468 paise.
The Reserve Bank of India fixed the reference rate for dollar at 59.8773 and for the euro at 82.4035.
The rupee bounced back against the pound to end at 100.50 from overnight close of 101.39 while shot up further against the euro to 81.82 as compared to 82.62.
It remained firm against the Japanese yen to 58.34 per 100 yen from last close of 58.91.
NOTE: The Forex and Money markets will remain closed tomorrow, May 14, on account of "Buddha Purnima".
First Published: Tuesday, May 13, 2014, 18:24