The Pakistani rupee sank to a new record low of 78.80 against the dollar Tuesday amid concerns over depleting foreign exchange reserves.

The rupee traded at 78.60-80 in the open market against the dollar, while in the inter-bank market it fell to 78.50-80.

The central State Bank of Pakistan (SBP) received 500 million dollars from the Asian Development Bank on Saturday, but last week's decline of around 700 million dollars in foreign reserves continued to cause panic on the markets.

Bankers say the SBP's existing reserves of 4.68 billion dollars are barely enough for one month's imports, leaving no choice but to start using 3.34 billion dollars of private bank deposits.

Pakistan has a history of freezing foreign currency bank accounts, as it did in 1998 when it faced a similar situation.

The continuous plunge in reserves from over 16 billion dollars just nine months ago has already downgraded the country's image among the leading credit rating agencies such as Moody's and Standard & Poor's.

Both the agencies believe Pakistan is close to a default on commitments against its external loan repayments.

A 15-nation grouping called Friends of Pakistan is scheduled to meet Tuesday in Abu Dhabi to discuss Pakistan's bail-out request for 15 billion dollars.

Pakistan is currently facing an inflation of more than 25 per cent and a widening current account deficit of over 14 billion dollars. The country's currency has depreciated by
22 per cent and stock market lost around 50 per cent in value in the last six months.