The rupee rallied on Monday to hit a 4-month high, gaining 51 paise at Rs. 53.79 against the US dollar on persistent selling of the American currency by banks and exporters as well as capital inflows.
The currency ended the day at Rs. 54.01 to the dollar, still 29 paise up from the previous close.
Sustained capital inflows from foreign funds in equity market mainly boosted the rupee value, a forex dealer said.
Weakness of dollar in the overseas market also boosted the rupee value.
The rupee resumed higher at Rs. 53.80 a dollar, against last weekend's level of Rs. 54.30 at the Interbank foreign exchange and rallied further to Rs. 53.66, before quoting at Rs. 53.79.
It had last closed at Rs. 53.79 to the dollar on May 15.
In New York, the dollar erased its gains for the year as the Federal Reserve's decision to buy more bonds devalued the currency, boosting investor appetite for stocks and commodities.