MEENA THIRUVENGADAM
Wall Street Journal
Thursday, September 3, 2009
WASHINGTON — China is on track to become the first purchaser of notes issued by the International Monetary Fund, a move that would diversify its foreign asset holdings and could give the IMF’s quasi-currency more clout.
The IMF on Wednesday said China has signed an agreement to purchase approximately $50 billion in notes from the fund. The notes are denominated in Special Drawing Rights, a quasi-currency issued by the fund and promoted by China as a potential replacement for the dollar as the world’s reserve currency.
(ARTICLE CONTINUES BELOW)
The agreement is the first of its kind for the fund and marks China’s most visible step toward shifting its investment focus away from the U.S. Treasurys market.
“The symbolism is very important here. It is no longer the U.S. dollar alone that the Chinese have access to,” said Eswar Prasad, a senior fellow at the Brookings Institution and former head of the IMF’s China division.
Loading ...
