PTI New Delhi

The rupee ended sharply below the psychologically crucial 87-per-dollar mark on Tuesday, posting its biggest single day fall in over three weeks, as banks persistently purchased the greenback on behalf of importers and foreign portfolio investors, dealers said. Banks also bought dollars to cover their existing short dollar bets ahead of the front-month currency futures contract expiry, which weighed on the Indian unit, they said.

However, banks sold the greenback, likely on behalf of the Reserve Bank of India and exporters, which limited losses for the Indian unit, according to dealers. "I think they (RBI) tried to protect 87.00 before and then came around 87.20, but the buying (of dollars) pressure was immense," said a dealer at a private bank.