Mumbai: The rupee on Tuesday lost eight paise to 54.81 against the dollar in early trade on the Interbank Foreign Exchange market due to higher demand of the US currency from banks and importers.

Forex dealers said dollar strengthening against other currencies in the global market also put pressure on the rupee.

The domestic currency had closed higher by seven paise at 54.73 yesterday on fresh dollar selling by exporters and moderate FII inflows. Meanwhile, the BSE benchmark Sensex recovered by 66.27 points, or 0.33 per cent, at 19,757.94 in early trade on Tuesday.