The rupee appreciated by 8 paise to 67.13 against the US dollar in early trade on Friday on fresh selling of the American currency by exporters and bankers on account of lower trade deficit in the last fiscal.
Forex dealers said besides selling of the American currency and positive economic data, a higher opening in the domestic equity market and weakness of the dollar against some other currencies overseas supported the rupee.
India’s current account deficit (CAD) narrowed sharply to $0.3 billion or 0.1% of GDP in the fourth quarter of 2015-16 from $7.1 billion or 1.3% in third quarter on account of lower trade gap.
For the full fiscal 2015-16, CAD stood at $22.1 billion or 1.1% of GDP as against $26.8 or 1.3% of GDP in 2014-15 on the back of contraction in the trade deficit.
The country’s trade deficit for the entire fiscal narrowed to $130.1 billion from $144.9 billion in 2014-15.
On Thursday, the rupee had lost 6 paise to 67.21 against the US dollar on fag-end demand for the American unit from banks and importers amid fall in domestic stocks.
Meanwhile, the benchmark BSE Sensex rebounded 188.80 points or 0.71% to 26,714.26 in early trade on Friday.