The rupee on Friday surged by 46 paise to a three-month high of 48.69/70 against the US currency amid sustained capital inflows and continued dollar selling by exporters and some banks.
Dealers said a sharp rally in stock markets and heavy capital inflows helped the local currency to bounce back. The rupee has gained 110 paise,or 2.23 per cent,in the last four trading days. Foreign funds have bought $2.6 billion of Indian shares and $3.2 billion of debt so far this years,as per the Sebi figures.
Recent measures by the Reserve Bank of India to curb corporate and interbank speculation,along with several steps to attract funds from non-resident Indians and foreign investors,have accelerated dollar inflows,supporting the rupee.
D Kannan,MD,Kotak Securities,said: Indian equities,up about 10 per cent for the month,outperformed the developed market indices by a wide margin.