Pakistan rupee hits record low after blast

Islamabad: Pakistan's rupee, Asia's worst performer this year, fell to a record low on concern a bomb attack that killed 53 people over the weekend in Islamabad will spur sales by global funds.

The currency dropped for a seventh day, the longest losing streak since December, after Prime Minister Yousuf Raza Gilani said the nation's leaders were the target of the terrorists who carried out the bombing of the Marriott Hotel in Islamabad.

The rupee also declined after crude oil had the biggest weekly advance since July, adding to speculation the nation's trade deficit will widen.

"The real investors are very cautious now as they fear an outflow of foreign exchange due to the law-and-order situation and the widening trade gap,'' said Syed Nabeel Iqbal, head of marketing and research at Khanani & Kalia International Ltd., a Karachi-based foreign-exchange trader. The rupee fell 0.4 per cent to 78.225 per dollar as of 4:41pm in Karachi, according to data compiled by Bloomberg. The currency is the world's fourth-worst performer with a 21.3 per cent drop this year.

Leaders in the government, including the president, prime minister and armed services chiefs, had scheduled a dinner at the hotel for the time it was bombed, though they moved the event shortly beforehand, Interior Ministry chief Rehman Malek said yesterday.

The planners of the bombing aimed to wipe out the Pakistani leadership, Gilani told the state news agency, the Associated Press of Pakistan.

Overseas investors sold $111 million of Pakistan's stocks and bonds during the first two months of the financial year that began July 1, compared with $147 million in the year-ago period, central bank data show.