IMF hails China move to purchase bonds

WASHINGTON – China’s decision to purchase the International Monetary Fund’s first-ever bonds underlines its strong support for the global economic and financial system, IMF chief Dominique Strauss-Kahn said Tuesday.

Beijing had earlier said that if the IMF bonds met its requirements ‘in terms of safety and return on investment’ it would consider buying up to US$50 billion of the financial instrument.’We are grateful to the Chinese authorities for signalling their intention to invest in IMF notes and thereby, helping the IMF membership weather this global economic and financial crisis,’ Strauss-Kahn said in a statement.’With this announcement, the Chinese authorities have signalled strong support for the international economic and financial system,’ he said in a statement welcoming the Chinese move.Strauss-Kahn said Beijing’s decision would be beneficial to all concerned parties.’On one hand, IMF members’ investment in Fund securities will boost the Fund’s capacity to help member countries – particularly developing and emerging market countries – cope with the crisis and thus benefit all members by facilitating an early recovery of the global economy.’At the same time, the new notes will offer members a safe investment instrument with reasonable return.’Strauss-Kahn said that IMF staff would present the necessary documentation to the Fund’s executive board to allow the issuance of notes as early as possible.The 185-nation IMF is struggling to provide financing to countries in trouble amid the global financial and economic crisis.It has been working to issue its very first bonds, and major developing economies such as Brazil, Russia, India and China – known collectively as the BRIC countries – are seen as potential buyers.China’s forex reserves are the largest in the world and currently stand at about 1,9 trillion dollars.The IMF said recently Russia intended to buy up to 10 billion dollars in the multilateral institution’s bonds. -Nampa-AFP