The rupee breached the 60-level to 59.91 against the dollar for the first time in eight months against the dollar, buoyed by strong equities and consistent fund inflows.
At the Interbank Foreign Exchange (Forex) market, the rupee surged 63 paise to 59.68 during the day but surrendered some gains.
Forex dealers said that Reserve Bank was present in the market at various levels, at 60, 59.95 and 59.85, which capped the rupee's gain.
The domestic currency finally settled the day at 59.91, a surge of 40 paise or 0.66% from its previous close.
Previously, the rupee had logged its intra-day high of 59.52 on July 30, 2014 and registered its closing high of 59.41 on July 29, 2014.
Forex dealers, however, said the rupee may weaken if the poll outcome is not as per market expectations.
"Higher inflows from foreign investors has been supporting the rupee," said Ramesh Singh, Treasurer at Central Bank of India, adding that once the current euphoria on hopes of a new government gets over and markets get stabilized, we may see some fall in the rupee.
Sustained dollar selling by exporters too aided the rupee sentiment, a dealer said.
Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said: "Today rupee traded strong throughout the day against the dollar and made eight month high of 59.68, taking cues from the local equities which traded at all time high."
The BSE benchmark Sensex scaled a new high for the fifth straight day today but ended a little lower at 22,339.97, which is its fresh closing record. It set all-time record of 22,363.97 points intra-day.
FIIs injected USD 375.44 million yesterday as per Sebi data.
The dollar index was up by a mere 0.05% against its major global rivals in overseas market.