US' Pompeo warns against IMF bailout for Pakistan that aids China

WASHINGTON (Reuters) - US Secretary of State Mike Pompeo warned 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. 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.” Many analysts and business leaders expect that another IMF bailout, the second in five years, will be needed to plug an external financing gap. 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.