Pakistan Will Have To Fully Disclose Debts Owed To ‘All Weather Friend’ China, If It Wants To Avail IMF Bailout

Christine Lagarde, the Managing Director of International Monetary Fund, has said that Pakistan’s request for financial assistance will be evaluated. She added that they would require "absolute transparency" over Pakistan's debts, especially those owed to China, Reuters has reported.

Lagarde explained that the IMF would need to know the extent and composition of a country's debt, including sovereign debt and state-owned enterprise debt, "so that we can actually really appreciate and determine the debt sustainability of that country, if and when we consider a programme," she added.

This requirement will help show the extent, composition and terms of Pakistan's debts to China which has loaned $60 billion for infrastructure projects as part of Beijing's Belt and Road Initiative (BRI).

The US Secretary of State has criticised China's infrastructure lending, alluding it to as debt traps for developing countries and terming it as having “no rationale”.

Pakistan's finance minister Asad Umar and Central Bank governor Tarik Bajwa had pleaded for an IMF bailout at its annual meeting in Bali.

The formal request follows an apparent 7 per cent devaluation of the Pakistani rupee by the central bank on Tuesday (9 October). If a package is agreed, it would be Pakistan's thirteenth IMF bailout since 1988. The Fund earlier lent Islamabad $6.7 billion in 2013.