[mkjan]

Pakistan's currency has slumped to a record low against the US dollar with as rising oil prices causing concern about its high trade deficit and high inflation.

Rising oil prices and falling foreign investment are fuelling 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 government is currently preparing a budget that is expected to include unpopular cuts in government spending and efforts to raise more taxes to contain a deficit expect to reach at least six per cent this year.