The Indian rupee rose to its strongest close in nine years on Thursday, supported by sustained capital flows, but suspected central bank intervention put the brakes on its gains during the day, traders said. The partially convertible rupee ended at 40.43/435 per dollar, up from its previous close of 40.450/455 and its strongest close since May 1998.
It hit a peak of 40.39 in early trade, close to a nine-year high of 40.28 set in late May, before dollar buying by the central bank knocked it down to a low of 40.52, traders said.
"With the stock market near an all-time high, capital flows are bound to accelerate in the coming days," a foreign bank trader said. The main share index hit a record high in early deals, but ended down 0.1 percent at 14,861.89 points. "The central bank bought dollars the whole day and this checked the rupee's gains," a state-run bank trader said, adding a big oil refiner was also buying dollars during the session.