INSUBCONTINENT EXCLUSIVE:
Pakistan had sought another $1 billion in loans to stabilise its foreign currency reserves
Secretary of State Mike Pompeo warned on Monday that any potential International Monetary Fund bailout for Pakistan's new government should
not provide funds to pay off Chinese lenders.In an interview with CNBC television, Pompeo said the United States looked forward to
engagement with the government of Pakistan's expected new prime minister, Imran Khan, but said there was "no rationale" for a bailout that
pays off Chinese loans to Pakistan."Make no mistake
We will be watching what the IMF does," Pompeo said
"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," Pompeo said.The Financial Times reported on Sunday that senior Pakistani finance officials
were drawing up options for Khan to seek an IMF bailout of up to $12 billion.An IMF spokeswoman said: "We can confirm that we have so far
not received a request for a Fund arrangement from Pakistan and that we have not had discussions with the authorities about any possible
intentions."Pakistan is struggling to avert a currency crisis that has presented the new government with its biggest challenge
Many analysts and business leaders expect that another IMF bailout, the second in five years, will be needed to plug an external financing
gap.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 stabilise its plummeting foreign currency reserves.Officials in the Trump administration, including U.S
Treasury Secretary Steven Mnuchin, have criticized China's infrastructure lending to developing countries, arguing that this has saddled
them with unsustainable debt.The $57 China-Pakistan Economic Corridor, a series of port and rail improvements associated with China's One
Belt One Road infrastructure push, has led to massive imports of Chinese equipment and materials, swelling Pakistan's current account
deficit.Pakistan has had 14 IMF financing programs since 1980, according to fund data, including a $6.7 billion three-year loan programme in
2013.© Thomson Reuters 2018(Except for the headline, this story has not been edited by TheIndianSubcontinent staff and is published from a
