United States Secretary of State Mike Pompeo on Monday warned 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 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 added that the US looked forward to engaging with Pakistan’s new government.

Pompeo was responding to a question on reports that Pakistan was drawing up a plan to seek a $12 billion (Rs 82,458 crore) bailout package from the IMF, PTI reported.

“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 spokesperson said.

Pakistan is struggling to avert a currency crisis which is likely to be the new government’s biggest challenge. The country already has around $5 billion (Rs 34,357 crore) in loans from China and its banks to fund major infrastructure projects, and had sought another $1 billion (Rs 6,871 crore) in loans to stabilise its plummeting foreign currency reserves.

The 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.