The rupee today strengthened by 16 paise to trade at 54.95 against the dollar at the Inter-bank Foreign Exchange on selling of the US currency by exporters.The rupee had lost 23 paise to close at five-month low of 55.11 a dollar yesterday due to sustained dollar demand from oil importers.Meanwhile, the BSE benchmark index Sensex recovered by 35.41 points, to 20,259.39 in early trade.