Pompeo warns against Pakistan bailout to pay off Chinese lenders

Secretary of State Mike PompeoMichael (Mike) Richard PompeoOvernight Defense — Presented by Raytheon — Lawmakers struggle with how to punish Saudi Arabia | Trump regrets not visiting Arlington for Veterans Day | North Korea deports detained American Corker: 'A price needs to be paid' for Khashoggi's murder White House eyeing ways to remove Erdoğan foe Gülen from US: report MORE on Monday said that if the International Monetary Fund (IMF) offers a bailout to the Pakistani government, none of the funds should go toward payments to Chinese lenders.

“Make no mistake. We will be watching what the IMF does,” Pompeo said during an interview with CNBC.

“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,” he said.

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The Financial Times reported Sunday that Pakistani officials were creating plans for incoming Prime Minister Imran Khan to seek a bailout from the IMF of up to $12 billion.

“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,” an IMF spokeswoman told Reuters.

Pakistan currently has about $5 billion in loans from China for infrastructure projects and is seeking another $1 billion to stabilize a currency crisis.

U.S. officials have largely opposed Chinese assistance to developing countries, arguing the nations are unable to pay back the loans and that creates unsustainable debt.