THE rupee plunged > 3.1 per cent against the dollar on the local interbank market Wednesday to its lowest level since December 2013 after staying stable at around Rs104.85/90 for two years.

It was its largest single drop in almost nine years, according to Bloomberg.

In the open market, the rupee suffered 2pc devaluation last week after remaining at around Rs105 and Rs106 against the dollar in recent years.

The slide continued unabated as the State Bankof Pakistan (SBP) did not intervene. The central bank reportedly supported the depreciation, saying it was needed to address the emerging imbalance in the external account and strengthen growth prospects of the country.

On the interbank market, trading activity remained suspended in the week`s opening session due to bank holiday on Monday. On Tuesday, the rupee posted four-paisa loss on the buying counter and three-paisa loss on the selling counter to Rs104.90and Rs104.91 amid tight dollar supplies due to the closure of US financial markets on Independence Day.

On Wednesday, the rupee plummeted 3.1pc to 108.50/109.50 against the dollar, sparking a shortage of foreign currency in the open market as dealers preferred to hold rather than sell. Later that day, the rupee improvedslightly to Rs108.25/30.

The rupee regained some ground in the fourth trading session and recovered Rs2.65 on the buying counter and Rs2.30 on the selling counter. It closed the session at Rs105.50/106.00.

In the last trading session, the rupee lost 65 paisa on the buying counter and 30 paisa on the selling counter before closing the week at Rs106.15 and Rs106.30.

In the open market, the rupee started the week on a stable note as it remained flat at Rs105.80 and Rs106.00 inthe first trading session. In the second session, however, the rupee shed 10 paisa. On Tuesday, the dollar climbed to Rs105.90 and Rs106.10.

On Wednesday, the local currency dropped in line with the interbank market by Rs1.60 on the buying counter and Rs2.15 on the selling counter to Rs107.50 and Rs108.25, respectively.

At the close of the week, euro was seen trading against the rupee at Rs106.00. During the week, the rupee posted gains of 150 paisa and 195 paisa on buying and selling counters in two sessions while it posted losses of 170 paisa and 225 paisa in the other two sessions.

Against euro, the rupee continued to trade rangebound last week. It showed a firm trend after opening the week in plus.

However, it turned minus following SBP`s abrupt move to devalue the rupee against the dollar on Wednesday, and the euro hit a fresh peak in 2017 to reach Rs120.30 and Rs122.30.