The rupee rose to nearly two-week high of 51.46/47 against the US dollar by gaining a smart 74 paise, buoyed by the rally in local stocks and expectations of more capital inflows.
The last time the local currency made a similar big gain was on on October 28, 2011 when jumped by 74 paise.
Fresh dollar selling by exporters on expectations of fall in dollar's value overseas too boosted the rupee sentiment, forex dealers said.
They said that dollar inflows into the government's debt instrument in yesterday's auction by the central bank too aided the rupee surge. However, dollar demand from oil importers restricted the rupee's gain, dealers added.
At the Interbank Foreign Exchange (Forex) market, the rupee opened strong at 51.84/85 a dollar. It further improved continuously in line with strong local equities.
It touched a a high of 51.40 before closing at 51.46/47, up 1.42%.
Meanwhile, the BSE benchmark index, Sensex, surged by nearly 360 points, or 2.23% to end the day at two-week high of 16,483.45.
After removing over $1.25 billion in last straight 11 sessions, FIIs pumped in $26.80 million yesterday, as per Securities Exchange Board of India's data.
On the other hand, food inflation dipped to 8% for the week ended November 19 from 9.01% last week.
The rupee premium for the forward dollar improved further on sustained paying pressure from banks and corporates.
