A surprise revaluation of the Chinese yuan on Thursday sent the rupee spiralling to a closing peak of Rs 43.20/25 per dollar, as the Indian unit adjusted sharply upwards following the dollar's virtual slump.
Minutes before the closing bell, the rupee soared to Rs 43.15/19 a dollar after the Chinese central bank revalued yuan and pegged it at 8.11 a dollar from 8.27 a dollar earlier, dealers said.
The rupee later settled at Rs 43.20/25 per dollar at the close, breaching the then 71-month closing highs of Rs 43.29/30-dollar struck on May 11, they added.
Under intense international pressure, China scrapped the yuan's peg to the US dollar and revalued the currency by 2.1 per cent to 8.11 per US dollar as of 1900 hrs (1630 hrs IST) the People's Bank of China, the central bank said on its website.
Starting from July 21, 2005, China will reform the exchange rate regime by moving into a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies.
The rupee gained 27 paise from previous closing levels of Rs 43.52 after the yuan revaluation in line with a spike in most other Asian currencies, particularly the Japanese yen, which surged to 110.71 a dollar from 112.65 a dollar, bankers said.
The interbank foreign exchange market was quiet for the better part of the day's business and only activated and turned volatile in the last ten minutes of trade following the unexpected yuan revaluation.
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