Surging by a massive 31 paise from last Friday's close of 44.13/14 per dollar, the rupee opened distinctly firm at 44.00/02 per dollar due to a tumbling dollar against major global rivals.
The rupee appreciated by over 91 paise last week and scaled over 7-month peak on the back of sustained heavy foreign portfolio investment and trade inflows.
Persistent heavy dollar supplies from strong FII and trade inflows in the face of a tumbling dollar overseas drove the rupee to new multi-month high with sentiments upbeat for further sharp gain, a dealer said.
However, fears of central bank intervention in the defense of rupee may contain steep gains, they added. Meanwhile, global crude oil slipped to $ 42.26 a barrel on expectation of lower demand, which is a further positive factor for the rupee.
FII investments in India are expected to rise further, thereby accelerating the current bull-run in forex market. FIIs have so far invested over $7.5 billion in the Indian market during the current calendar year. In November itself, FII inflows were at $1.78 billion.
Heavy investment inflows and revaluation of currencies led to a surge in the country's foreign exchange by a record $1.82 billion during the week ending November 26.
Analysts said remittances of export proceeds, FII's and revaluation of global currencies contributed to the spurt in reserves. In cross currency trades, the Euro was quoted at 59.05/08, Pound Sterling at 85.28/31, Japanese Yen (100) at 42.96/99.