Mumbai: The Indian currency has climbed up to its 9-½ year peak today (Thursday) as capitalists placed a bet on capital inflows into Indian securities markets after the U.S. Fed Reserve cut interest rates. However the suspected RBI involvement has capped the capital gains.

In early trading, the partially convertible rupee stood at 39.31/32 per dollar that was its highest record since March 1998. Yesterday, it ended the day at 39.322/325.

The chief trader with a foreign banking institution said, “The market had discounted a Fed rate cut, though we're still expecting some flows.”

“But I’m not expecting the flows to be anything close to the what came in after the last cut, and there's a lot of concern about possible steps to moderate capital flows,” the trader added.

Yesterday, the U.S. Federal Reserve slashed the interest rates by 25 basis points to 4.5%, following up a half-point reduction during September this year, as the RBI tried to oppose the housing market’s hit to the broader economic system.

Foreign capitalists have transferred around $8 billion into Indian bourses since the U.S. Federal Reserve decreased interest rates on Sept. 18.

Today, the stock market opened strongly, carrying its earning to over 27% since the September rate cut.

The dealers said that the rupee gains were capped by RBI involvement.

In the first eight months of the existing year, the RBI has purchased around $40 billion to test out the rupee’s increase, and analysts told that it had interposed through September and October.