Mumbai: The Indian rupee strengthened in the afternoon trade, after data showed India’s trade deficit narrowed. At 2.25pm, the domestic currency was trading at 62.275 per dollar, up 0.26%, from the previous close of 62.4375. The local currency had opened at 62.3725 per dollar but slid to 62.45 a dollar before strengthening on improved trade data. The rupee had weakened considerably on Monday after state-run banks queued up to buy dollars for their oil marketing clients. On Tuesday, banks were seen selling some dollars, taking advantage of a better exchange rate. Data showed trade deficit narrowed to $9.92 billion in January from $10.14 billion in December. Exports rose 3.8% year-on year to $26.75 billion while imports fell 18% to $36.67 billion because of restrictions on precious metals import. The dollar index, which measures the US currency’s strength against major global currencies, was trading at 80.523, down 0.15% from the previous close of 80.642. The yield on India’s 10-year benchmark bond was trading at 8.754%, compared with its previous close of 8.693%. India’s benchmark Sensex was trading at 20,406.7 points, up 0.35%, from previous close.

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