China will buy approximately US$50 billion in bonds issued by the International Monetary Fund, AFP reported. The IMF said China had signed an agreement on Wednesday in Washington to buy the bonds, which are denominated in Special Drawing Rights (SDRs). Chinese central bank Governor Zhou Xiaochuan raised SDRs earlier this year as the basis for a global reserve currency alternative to the US dollar. The agreement was the first-ever note purchase agreement for the IMF; the organization has turned to bonds in an attempt to increase its resources to help member nations hit by the economic downturn. The investment also helps China in its attempts to diversify its foreign asset holdings.
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