PM Khan asks Finance Ministry to examine how debts zoomed over past 10 years

"We need to know where that money went and what projects it was used in. Our government has just come in and we have been forced to take loans to pay off the loans that they [the previous governments] took. At least we should know where those loans went," he said while while chairing a meeting of his Cabinet.

Pakistan's foreign currency reserves dropped to USD 8.4 billion in late September, barely enough for current debt payments. Khan's government blames the previous administration for the country's economic woes.

It is unclear how much Pakistan will seek to borrow from the International Monetary Fund, but the country's media outlets have reported that at least USD 8 billion is needed to tackle the current crisis.

During the Cabinet meeting, Khan instructed the finance Ministry to conduct an analysis of how Pakistan's debt increased from Rs 6,000 billion to Rs 30,000 billion in the span of 10 years, Radio Pakistan reported.

"This analysis is also important as our government, which sees that the country is already in debt, will have to think twice about taking more loans. We will at least have to see that the loans that we take create more wealth so that they can be returned," he said.

Khan directed the finance ministry to present its detailed analysis on the matter in another Cabinet meeting.

The prime minister's directive came on a day when Pakistan's Finance Minister Asad Umar met with IMF Managing Director Christine Lagarde in Nusa Dua, Indonesia and formally sought a bailout from the global lender.

"During the meeting, they requested financial assistance from the IMF to help address Pakistan's economic challenges," Lagarde said in a statement.

"An IMF team will visit Islamabad in the coming weeks to initiate discussions for a possible IMF-supported economic programme," she said.

Pakistan has approached the IMF for a bailout a dozen times since the late 1980s. The most recent was in 2013, when it received a USD 6.6 billion loan to tackle a similar financial crisis.