China buys first IMF bonds

China has agreed to buy the first International Monetary Fund bonds for about $50 bn (£31bn). IMF managing director Dominique Strauss-Kahn and the deputy governor of the People’s Bank of China, Yi Gang, signed the agreement yesterday at IMF headquarters in Washington. Under the agreement, the Chinese central bank will purchase up to 32bn SpecialDrawing Rights (SDRs), worth around $50bn. An SDR is an interest-bearing IMF asset based on a basket of international currencies – the dollar, yen, euro and pound – that is calculated daily and which members can convert into other currencies. The IMF approved the plan to issue notes to governments on 1 July.