The intervention on Wednesday was aggressive, with traders telling that the Reserve Bank of India likely bought nearly $1 billion and swapped it in forwards markets.
The RBI has long been expected to start buying dollars when the rupee strengthens to add to foreign exchange reserves of $297.29 billion - the highest since late December 2011.The apex bank's dollar purchases would reflect the strength of a rupee rally.
The RBI had to regularly buy the domestic currency just about half a year ago to keep it from hitting record lows.
60 is a very crucial psychological level, which if breached, may trigger stop losses and there will be fresh views in favour of the rupee.
The rupee closed at 60.14/15 per dollar, after hitting 60.04 - its strongest since July 30 and 0.6 per cent above its Tuesday close of 60.48/49.
The onshore forward premiums also rose on the back of the sell/buy swaps put forth by the central bank, dealers said. The one-year forward premium rising to as high as 507.50 points versus its close of 489.50 points on Monday.
In the offshore non-deliverable forwards, the one-month contract was at 60.60 while the three-month was at 61.28.