The rupee and bonds surged to more than one-month highs on Thursday morning as the U.S. Fed refrained from withdrawing monetary stimulus as had been widely expected by global markets.
Emerging Asian currencies rallied with most Southeast Asian units up around 2 percent after the U.S. Federal Reserve surprised investors by postponing the start of reductions to its stimulus programme.
The partially convertible rupee was at 61.88/89 per dollar by 0908 India time (0338 GMT) compared to its close of 63.38/39 on Wednesday. The unit rose as high as 61.65, its strongest since August 16.
The benchmark 10-year bond yield trading at 8.18 percent, after dropping to 8.14 percent, its lowest since August 8.
India's 1-year OIS rate trading down 32 bps at 8.80 percent while the benchmark 5-year OIS down 28 bps at 8.02 percent, dealers said.