ISLAMABAD: US Secre­tary of State Mike Pompeo assured Pakistan last week Washington would not try to block any request for a bailout from the International Monetary Fund (IMF), Information Minister Fawad Chaudhry said on Tuesday.

The remarks, which the minister said Mr Pompeo made during his visit to Pakistan on Wednesday, came in stark contrast to the US secretary’s warnings in July that the United States had serious reservations about the IMF giving money to Pakistan due to concerns Islamabad would use the cash to pay off Chinese loans.

Those comments rattled Islamabad, which is facing a financial crisis and may have no option but to turn again to the IMF to prop up its foreign currency reserves.

Mr Chaudhry said that relations between the United States and Pakistan were “broken” before Mr Pompeo’s trip to Islamabad but the visit had “set many things straight” and re-invigorated ties.

“He assured Pakistan that... if Pakistan opted to go to IMF for any financial help, the USA will not oppose it,” he said.

The US embassy in Islamabad did not have any immediate comment on the matter.

The government of Prime Minister Imran Khan, who took office in August, is trying to avert a currency crisis caused by a shortage of dollars in an economy hit by a ballooning current account deficit and dwindling foreign currency reserves.

Pakistani officials say they are discussing taking drastic measures to avert seeking a bailout from the IMF, which has come to Pakistan’s rescue 14 times since 1980, including most recently in 2013.

Pakistan’s relations with the United States have soured in recent years over the war in Afghanistan. Ties dropped to a new low when President Donald Trump in January accused Pakistan of “lies and deceit by playing a double game on fighting terrorism”.

Islamabad denies aiding militants in Afghanistan and lashed out against Mr Trump’s remarks, which were followed up by Washington suspending US military aid.

At the United States’ urging, a group of Western countries in February convinced a global body to put Pakistan on a terrorism financing watch list, a move that triggered concerns the United States might also seek to block Islamabad in other forums.

In July, Mr Pompeo said there was “no rationale” for the IMF to bail out Pakistan. His worries that Islamabad would use the IMF money to pay off Chinese loans echoed concerns by other US officials that China was saddling many emerging market countries with too much debt. Beijing staunchly denies such claims.

But during last week’s visit Mr Pompeo said he was hopeful of “a reset of relations” long strained over the war in Afghanistan.

Published in Dawn, September 12th, 2018