Karachi  - Pakistan's financial sector behaved erratically on Tuesday as the rupee weakened against the dollar while stocks traded unevenly on lackluster buying, traders said.

The Pakistani rupee weakened to its lowest in four days, to 66.91 against the dollar in the inter-bank market on continued import pressures and rising current account deficit due to high oil prices.

In the unofficial open market the rupee slid to 68.30 versus the dollar and dealers said it would fall further.

The Karachi Stock Exchange's key KSE-100 Index pared losses to close up 0.45 per cent or 53 points at 12,497 points after losing around 150 points earlier in the day.

Traders said some institutional buying in the oil sector moved the index up after losing 4 per cent earlier on Monday.

Reports that government is no longer planning to withdraw its deposits from the public and private banks to put into the central State Bank of Pakistan also calmed tensions in the market.

Pakistan's five largest banks could face a potential collapse if the government switched its deposits into the central bank. (dpa)