Mumbai: The rupee strengthened by 20 paise to Rs 49.59 a dollar in early trade on the Interbank Foreign Exchange market on Tuesday on increased foreign capital inflows.

Dealers said rupee gained due to foreign capital inflows and dollar's fall against major world currencies overseas.

The rupee had depreciated by 48 paise against the US currency to close at Rs 49.79/80 in the previous session on Monday on sluggish local equities amid fresh dollar demand from importers.

Meanwhile, the BSE benchmark Sensex rose by 183.75 points, or 1.09 percent, to 17,047.05 in early trade.