The Indian rupee rallied to a two-month high of 60.92 against the US dollar in late morning deals today on persistent selling of the USD by banks and exporters on the back of sustained capital inflows from foreign funds.
The domestic currency resumed higher at 61.19 per dollar as against the last closing level of 61.23 at the Interbank Foreign Exchange (Forex) Market.
It firmed up further to a two-month high of 60.92 per dollar before quoting 61.01 per dollar at 1050 hours, showing showed a gain of 22 paise from its last close.
It moved in a range of 60.92 and 61.20 per dollar during the morning deals.
Sustained foreign capital inflows from foreign funds in view of strong domestic market mainly boosted the rupee value against the dollar, a Forex dealer said.
Meanwhile, the Indian benchmark BSE-30 share index Sensex rose by 297.70 points or 1.46 per cent to 20,713.21 at 1050 hours.
In New York market, the dollar fell yesterday as US lawmakers reached a deal to avoid default and end the 16-day partial government shutdown, with currency analysts now looking at another Washington showdown, possibly early next year.
The Indian rupee extended its gains to the highest in more than two months on Friday, breaching the psychological 61 per dollar mark, as broad losses in the greenback versus major currencies and gains in the domestic share markets aided.
The partially convertible rupee was at 60.94/95 per dollar at 1008 IST (0438 GMT), after hitting 60.92, its strongest since August 18 and higher than its close of 61.23/24 on Thursday.
The index of the dollar against six major currencies was up 0.1 percent, while BSE Sensex was up 1.2 percent.