Indian rupee opens marginally down at 86.42 against dollar

Rupee

The Indian rupee opened marginally down on January 16 at 86.42 against the US dollar after ending the previous session at 86.3625.

After opening lower, the local currency made some recovery to trade at 86.40. The rupee gained on January 15 due to multiple factors including improved trade balance and intervention by the Reserve Bank of India (RBI).

India’s balance of trade data emerged as a key driver, with the deficit narrowing to $21.94 billion. The improvement was underpinned by a robust $6 billion growth in exports and $10 billion decline in imports.

The last time India's merchandise trade deficit was lower was in September when it came in at $20.79 billion.

Even month-on-month, the trade deficit in goods was narrower in December against the revised figure of around $32.84 billion for November.

Earlier, the commerce ministry said the country's merchandise trade deficit widened to a record-high of $37.84 billion in November from $27.14 billion in the previous month. However, a downward revision of $5 billion in the data for gold imports lowered the overall gap in imports and exports for the  month.

The RBI intervened in the forex market through a Buy-Sell swap, providing additional support to the rupee, currency experts said.