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China Set To Buy $50 Billion In IMF Notes

  • Author:judy
  • Source:www.diecastingpartsupplier.com
  • Release on:2016-05-05

China is, as expected, on track to become the firstpurchaser of notes issued by the InternationalMonetary Fund, a move that would diversify itsforeign asset holdings and could give the IMF'squasicurrency more clout.

The IMF on Wednesday said China has signed an agreement to purchase approximately $50billion in notes from the fund. The notes are denominated in Special Drawing Rights, aquasicurrency issued by the fund and promoted by China as a potential replacement for thedollar as the world's reserve currency.

The agreement, announced in July, is the first of its kind for the fund and marks China's mostvisible step toward moving its investment focus away from the U.S. Treasurys market. It givesthe IMF about a quarter of the $250 billion capital increase needed to fight the global financialcrisis.

Countries including Brazil, Russia and India also have expressed interest in purchasing IMFnotes, whose issuance is meant to bolster the fund's lending capacity and help fulfill a G-20pledge to strengthen the Fund's own capital position.

A Treasury spokesman had no comment.

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