“No rationale” for an IMF bailout that pays off Chinese loans to Pakistan: Mike Pompeo

According to a report published in Reuters, the US Secretary of State Mike Pompeo warned on Monday that any potential International Monetary Fund bailout for Pakistan’s new government should not be used to pay off Chinese lenders.

Pompeo said the United States looked forward to engagement with the government of Pakistan’s expected new prime minister.

According to the report, Pakistan, which already has around $5 billion in loans from China and its banks to fund major infrastructure projects, had sought another $1 billion in loans to stabilize its plummeting foreign currency reserves.

The Financial Times reported on Sunday that senior Pakistani finance officials were drawing up options for Pakistan to seek an IMF bailout of up to $12 billion.

Pakistan has had 14 IMF financing programs since 1980, according to fund data, including a $6.7 billion three-year loan program in 2013.