Karachi: Pakistan's currency slumped to a record low against the US dollar today as rising oil prices exacerbate concern about its yawning trade deficit and high inflation.

The dollar was worth 69 Pakistani rupees in official interbank trading today afternoon compared to 67.70 rupees the previous day. The rupee s previous low was about 68 to the dollar in the wake of the September 11,2001,terrorist attacks, a level it also touched in 1998,after the country's nuclear test.

Rising oil prices and falling foreign investment are fueling Pakistan's balance of payments problems and inflation, both of which undermine demand for and confidence in the rupee.

The currency has shed about 10 per cent of its value against the dollar since late February amid rising doubts about whether Pakistan's fast economic growth is sustainable.

The slide has coincided with the formation of a new coalition government, which accuses the previous administration loyal to President Pervez Musharraf of neglecting and concealing the problems.

Demand for dollars is soaring along with the price of Pakistan's oil imports. Pakistan sells rupees and buys dollars in order to pay for imported fuel. Crude oil has risen to a record USD 124 per barrel this week.

Meanwhile, inflows of investment and remittances from Pakistanis working overseas have failed to keep up, limiting the demand for rupees.

The World Bank warned in March that Pakistan risked an economic "crisis" unless its new government took stern action.

Source : PTI