Pakistani rupee resumes slide, politics weighs

By Sahar Ahmed

KARACHI (Reuters) - The Pakistani rupee slid back towards record lows on Monday shortly before a 6-week-old coalition government split, throwing into question management of an economy facing mounting problems.

The rupee has fallen 10.4 percent so far this year, prompting the Finance Minister Ishaq Dar to threaten "stringent actions" against speculators that he said were playing havoc with the market.

Adding to the economic woes facing the country, data showed annual consumer inflation shot up in April to more than 17 percent and wholesale inflation jumped to 23.5 percent.

The rupee closed at 68.00/69.00 per dollar, down from early quotes around 67.00, but still 2 percent firmer than a record closing low of 69.40/60 struck on Friday. The market closed before the inflation data was released.

"The crisis is still not over, there are still economic and political concerns which will keep the rupee under pressure," said a Karachi-based dealer.

A brewing political crisis has undermined a currency already under pressure from a mounting oil import bill, multi-year-high inflation, and a burgeoning fiscal deficit.

After the market closed, former prime minister Nawaz Sharif pulled his party out of a coalition government after failing to break a deadlock with its main coalition partner over the reinstatement of judges dismissed by President Pervez Musharraf.

Sharif said his party's cabinet ministers, including Finance Minister Dar, would hand in their resignations on Tuesday.