At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced strong at 59.50 a dollar from previous close of 59.68 and immediately touched a low of 59.62 on some hesitancy in local equities in morning deals.
Later, rupee bounced back to a high of 59.10 before settling at 59.29 - level not seen since July 26, 2013 when it had closed at 59.04. Today, the rupee rose 39 paise or 0.65 per cent over its Tuesday's close of 59.68. Forex markets were closed on Wednesday.
As per stock exchange data, Foreign Institutional Investors (FIIs) pumped in a net Rs 934 crore in Indian stocks today.
Pramit Brahmbhatt, Veracity Group CEO said," The rupee appreciated over half per cent during the day as local equities closed all time high level. The trading range for the Spot USD/INR pair is expected to be within 58.80 to 59.80." The firm dollar overseas could not stem the rupee rise. Dollar index, a gauge of six major global rivals, was last trading up 0.28 per cent.
The Reserve Bank today said it has put in place contingency plans to infuse liquidity into the system to deal with any possible volatility in markets tomorrow in view of the election results.
"Amid optimism over the election results and consistent gains in the stock markets, rupee is leading the gains among emerging Asian currencies," said Abhishek Goenka, CEO, India Forex Advisors.
Meanwhile, in see-saw trade today, the Indian benchmark S&P BSE Sensex registered its new closing peak and closed up by over 90 points or 0.38 per cent. FIIs had infused USD 610.16 million on May 13 and 14, as per Sebi data.
Meanwhile, premium for forward dollar remained weak on persistent receipts by exporters. The benchmark six-month premium payable in October dipped to 216.5-218.5 paise from Tuesday's close of 222.5-224.5 paise and far forward contracts maturing in April, 2015 also dropped to 443-445 paise from 455.5-457.5 paise.
The Reserve Bank of India fixed the reference rate for dollar at 59.4745 and for the euro at 81.5526.
The rupee shot up further against the pound to 99.32 from 100.50 previously and also hardened against the euro to 81.00 from 81.82. It too moved up further against the Japanese yen to 58.17 per 100 Japanese yen from 58.34.