Pakistan won’t use possible IMF funds to repay China

As Pakistan aims to ease its economic woes, the country has dismissed the notion that it would use any funds from a possible bailout from International Monetary Fund (IMF), the US based international lender to repay its debts to China.

Instead it would use them to continue financing its imports, informed a government official.

If the U.S. "vehemently" objects to an IMF bailout, "we are going to convince them that this money will not go to China," said Abdul Qadir Memon, Pakistan's consul general in Hong Kong, reported Nikkei Asian Review. "It will go to balance our external accounts so that we are able to sustain our imports for the next year or so," he said.

Last month, US Secretary of State Mike Pompeo warned on that any potential International Monetary Fund bailout for Pakistan’s new government should not provide funds to pay off Chinese lenders.

“Make no mistake. We will be watching what the IMF does,” Pompeo said, in an interview to CNBC, back in July. “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 Pakistan-US ties have continued to deteriorate, as just days ago, the US military made a decision to cancel $300 million in Coalition Support Fund (CSF) to Pakistan that had been suspended over Islamabad’s perceived failure to take decisive action against militants.

The Trump administration says Islamabad is granting safe haven to insurgents who are waging a 17-year-old war in neighboring Afghanistan, a charge Pakistan denies.