The rupee gained 16 paise to 48.91 against the US dollar on the Interbank Foreign Exchange market in early trade today on increased foreign fund inflows.

Dealers said increased foreign funds inflows mainly supported the rupee. Also, gains in euro against the dollar overseas kept rupee's sentiments firm.

The rupee had closed 15 paise higher at Rs 49.07/08 over its previous close against the dollar yesterday on fresh dollar selling by exporters amid rebound in equities.
Meanwhile, the 30-share BSE Sensex moved up by 268.95 points, or 1.52 per cent, to 18,000.07 in early trade.