Washington, July 31: US Secretary of State Mike Pompeo has warned against providing an International Monetary Fund (IMF) bailout for Pakistan’s new government that includes funding to pay off Chinese lenders. The issue arises from Pakistan’s dependence on China for infrastructure subsidies, which have left Islamabad deeply indebted to Beijing. Pakistan reportedly plans to ask for $12 billion from the IMF, but this has not been confirmed yet. “Make no mistake. We will be watching what the IMF does,” Pompeo told CNBC in an interview on Monday.
“There’s no rationale for IMF tax dollars — and associated with that, American dollars that are part of the IMF funding — for those to go to bail out Chinese bondholders or China itself.”
Pakistan is grappling to avert a currency crisis, making it the biggest challenge for the new government which is likely to take oath in August.
According to Dawn, the Tehreek-e-Insaf’s government of Imran Khan will immediately have to approach the IMF for what would be the country’s 13th bailout from the fund.
Pompeo said that the US was looking forward to engagement with Pakistan’s upcoming government, but added that there was “no rationale” for a bailout that pays off Chinese loans to Pakistan, Washington Examiner reported. (IANS)