China open to boosting IMF’s firepower via bond issue

          BEIJING, March 23 (Reuters) – China is ready to explore all channels to raise money for the International Monetary Fund and would actively consider subscribing to a bond issue by the Washington lender, a senior central bank official said on Monday.
Increasing the firepower of the IMF so it can bail out countries felled by the global financial crisis will be high on the agenda of a summit on London on April 2               of the Group of 20 advanced and emerging economies.
Issuing bonds would be a way for the IMF to raise large sums of money in short order, Hu Xiaolian, a vice governor of the People’s Bank of China, told a news conference on China’s preparations for the G20.
“If the IMF decides to issue bonds to raise funds, China will actively consider buying,” she said.
Hu, who is also head of the State Administration of Foreign Exchange, said another way of raising funds fairly quickly was the New Arrangements to Borrow           (NAB), a long-standing pact among 25 member countries to lend to the IMF in case of need.
China is not a member of the NAB. If it were to join — and Hu did not address this issue — expanding the agreement could take up to three months, international officials have estimated.
Countries can also contribute bilaterally. Japan is making a $100 billion loan, while the European Union agreed last week to put up 75 billion euros.
The IMF has said it needs an extra $250 billion to double its war chest. The United States has suggested a $500 billion increase.
STICKING WITH THE DOLLAR
Beijing has repeatedly called for a louder voice for developing countries in the IMF, a stance that Hu and He Yafei, a vice foreign minister, reaffirmed on Monday.
China hoped the G20 summit would help to shore up the fight against protectionism and lend continued support to developing nations, He added.
Pressed whether China would insist on an increase in its IMF quota, or membership subscription, in return for providing more funds, Hu said the distribution of quotas was a complicated issue that required in-depth study.
G20 finance ministers agreed in London earlier this month to bring forward the next review of IMF quotas to 2011 from 2013.
Asked whether the G20 should back the establishment of a new global regulatory institution or a new global currency, Hu said the current priority was for the IMF to step up its supervision of the policies of reserve-currency countries such as the United States.
A senior Russian government source said last Thursday that China and other emerging nations backed Russia’s call for a discussion on how to replace the dollar as the world’s primary reserve currency.
But Hu said that, while research could start into the merits of a multi-currency global reserve system, the dollar remained the dominant currency; the priority now was not to replace it.
U.S. Treasuries were an important part of China’s foreign exchange reserves and Beijing would keep buying them as it viewed the overall credit risk as low, Hu added. (Reporting by Zhou Xin and Simon Rabinovitch; Editing by Alan Wheatley)
By Simon Rabinovitch

Related Posts

EU takes different approach to financial crisis

Official says China to continue buying US debt

2 Responses

  1. hOsrzS xznpglmmnutv, [url=http://hcihjcwmwvmv.com/]hcihjcwmwvmv[/url], [link=http://iyfnsmxngsjo.com/]iyfnsmxngsjo[/link], http://copzwxhhzazp.com/

  2. ebL4lj gnvjmnsfjsdp, [url=http://afoghlmlemqr.com/]afoghlmlemqr[/url], [link=http://ocloimclipdx.com/]ocloimclipdx[/link], http://mgoddlzcdntc.com/

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: