Rupee hits an 8-month high of 60 a dollar

The rupee touched an eight-month high of 60 against the dollar in morning trade today on fresh selling of the US currency by exporters and persistent inflows of foreign funds.

The rupee resumed trading at 60.18 per dollar against yesterday's closing level of 60.31 at the interbank foreign exchange market and firmed up further to a high of 60.00, before quoting at 60.02 per dollar, showing a gain of 29 paise.

It moved in a range of 60-60.18 per dollar during the morning trade. The rupee last traded at 59.52 during the intra-day deals on 30 July 2013.

The BSE Sensex and the broader Nifty also hit record highs for a fifth successive session, which was reflected in the sharp gains in the currency as well.

The rupee gained on the back of continued buying by overseas investors, who bought domestic shares worth Rs2,192 crore on Thursday, taking total inflows so far in 2014 to more than Rs20,000 crore.

The benchmark BSE Sensex rose 58.35 points or 0.26 per cent to 22,272.72 at 1000 hours after touching an all-time high of 22,363.97.

The rupee's gains come against a firmer dollar that gained against the euro and other rivals yesterday as investors bet on the Federal Reserve starting to hike rates.

While further gains in the rupee could be capped by dollar demand from importers to meet month-end commitments, the Reserve Bank of India is also likely to buy dollars to boost its foreign exchange reserves.

Traders expect the rupee to trade in a 59.50-61.00 range in the near term.