Pakistan39;s rupee in free fall after artificial cap removed
The move aims at meeting demands set by IMF
Pakistan desperately needs external financing to ward off crises
FinMin Ishaq Dar39;s attempts to defend rupee failed

KARACHI, Pakistan, Jan 26 Reuters The Pakistani rupee fell about 7 against the dollar in the interbank market on Thursday, two days after foreign exchange companies removed a cap on the exchange rate, in a move that could help convince the International Monetary Fund to resume lending.

Facing an increasingly acute balance of payment crisis, Pakistan is desperate to secure external financing, with less than three weeks worth of import cover in its foreign exchange reserves.

Pakistan secured a 6 billion IMF bailout in 2019. It was topped up with another 1 billion last year to help the country following devastating floods, but the IMF then suspended disbursements in November due to Pakistan39;s failure to make more progress on fiscal consolidation.

Aside from wanting the government to reduce its budget deficit, the IMF is pushing for it to move to a marketdetermined exchange rate regime.

The foreign exchange companies said they had removed the cap for the sake of the country, because it was causing artificial distortions for the economy.

The rupee39;s official rate, in the interbank market, weakened by 7 to 248 per dollar on Thursday, having shown little change on Wednesday.

In the open market, the rupee weakened from 243 rupees to the dollar to…