Spurting by a whopping 21 paise, the rupee scaled a fresh over 50-1/2-month closing peak at Rs 43.53/54 per dollar on Wednesday, propelled by robust trade and foreign capital investment inflows even as the central bank made a feeble attempt to contain its rise.

In a fairly volatile trade at the interbank foreign exchange (forex) market, the rupee opened on a positive note at Rs 43.71/73 per dollar and surged to the day's high of Rs 43.41/44 on the back of strong trade and foreign fund inflows, coupled with the renewed dollar weakness overseas.

Dollar demand from state-run banks, possibly on behalf of the Reserve Bank of India pulled the rupee down to Rs 43.55/57, before settling at Rs 43.53/54 at the close, a whisker away from Rs 43.5225/5275 per dollar struck at the close of business on January 5, 2000, dealers said.

The dollar slipped back against major European currencies on Tuesday, after having climbed to four-month highs against the euro and Swiss franc on Monday.

Huge dollar inflows by foreign institutional investors, who applied in the recently concluded public offers was the main reason behind the unprecedented appreciation of the rupee, dealers said.

The rupee had last ended near the vicinity of today's close at Rs 43.55/65 per dollar in hyper volatile trade on March 31 and had touched 57-month peaks of Rs 43.30/32 in early deals on April 2, forcing central bank intervention to pull it down to Rs 43.7350/7450-dollar at close.

On the back of record FII inflows, remittances by the Indian diaspora touched a new high of $18.3 billion in 2003, making it the highest recipient of worker remittances in the world, with Mexico a distant second.

Traders expect the rupee to strengthen further in the near to medium-term, given the cushion of FII inflows, foreign direct investments and increased export proceeds.

Meanwhile, the rupee's relentless appreciation against the dollar was turning into a major challenge for export-oriented companies, affecting their bottomlines, analysts said.

RBI fixed the reference rate for the US currency at Rs 43.56 per dollar and the single European unit at Rs 52.53 per euro.

The futures segment was also active and after hectic two-way movements, late paying pressure pushed up premiums, particularly at the longer end.

Export cancellations of forward deliveries and renewed import booking of open exposures, coupled with state-run banks sell-buy swaps, pushed up premiums, dealers said.