Rupee at a 5-month high of 47.88/89 vs dollar

The Indian rupee closed at a five-month high of 47.88/89 against the US dollar, up Rs1.51 or 3.08 per cent from the previous close, as the local currency surged on the back of a spurt in the stock markets.

The benchmark stock index, the BSE Sensex, zoomed 2,110.79 points or 17.34 per cent, after it became clear that the UPA has a near-clear majority in the Lok Sabha to form a stable government at the centre.

The rupee bounced back on hopes of heavy capital inflows, following a the Congress-led UPA good show in the general elections.

This is for the first time that the rupee breached the 48-to-a-dollar level since 19 December 2008.

The rupee, which opened trading at 48.48/52 to a dollar, hit a low of 47.75 and a high of 48.65 against the greenback in fairly active trading.

Trading in the stock market was suspended twice after it hit the upper circuit filter.

Forex dealers expect a steady inflow of overseas capital through FDI, ECB and equity with a new impetus for pushing reforms.