The rupee on Tuesday strengthened by 16 paise to trade at 54.95 against the dollar at the Interbank Foreign Exchange on selling of the US currency by exporters.

The local currency had lost 23 paise to close at five-month low of 55.11 a dollar on Monday due to sustained dollar demand from oil importers.

Dealers said besides increased dollar selling by exporters, a higher opening in domestic equity market and euro’s gain against the American currency overseas helped the rupee recover.

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