China: use IMF bonds cash to fight crisis

Special Report:Global Financial Crisis

BEIJING, April 27 -- Any money raised by the sale of
bonds to the International Monetary Fund (IMF) should be used to help developing
countries, China said.

The BRIC nations, made up of Brazil, Russia, India
and China, have called on the IMF to issue the debt instrument as a temporary
measure to increase its resources.

World Bank (WB) President Robert
Zoellick (L) and International Monetary Fund (IMF) Managing Director
Dominique Strauss-Kahn attend the semi-annual session of the Joint
Development Committee of the World Bank and the International Monetary
Fund, in Washington, the U.S., on April 26, 2009. The session was convened
as the spring session of the two institutions entered its second day.
(Xinhua/Zhang Yan)
Photo
Gallery

The four countries are interested in buying the
bonds, the institution's managing director Dominique Strauss-Kahn said at the
IMF spring meeting on Saturday.

"Now we're discussing with different creditors the
way to implement it and the amount that we put in it," he said.

During the G20 summit, British Prime Minister Gordon
Brown said China was willing to pledge up to 40 billion U.S. dollars to the IMF.

While *** no mention of China's promise, Central
Bank Governor Zhou Xiaochuan said the IMF should use its increased resources to
support developing countries in their effort to cope with the financial crisis
and maintain economic development.

He added that developed countries should assume the
main responsibility for stabilizing the financial markets and reigniting
economic growth.

China has already played an active role in
stabilizing global finance and economic growth, Zhou said. Since last year,
China has signed bilateral agreements on currency swaps worth 650 billion yuan
(95 billion U.S. dollars) with South Korea, Malaysia, Belarus, Indonesia and
Argentina as well as China's Hong Kong.

China will continue its pro-active fiscal policy and
its moderately loose monetary policy to maintain momentum in the country's
stable, relatively fast growth, Zhou said.

Brazil's Finance Minister Guido Mantega was quoted by
Dow Jones as saying that the bond should have a relatively short maturity of
around one year, should yield more than U.S. Treasury notes, should qualify as
government reserves and should be tradable on the secondary market.

Mantega said emerging markets that need the money
most should benefit from the new securities the IMF is considering issuing.

Also on Saturday, Zhou stressed the IMF should push
for reforms of special drawing rights - an international reserve asset created
by the IMF to supplement reserves of member countries.

The World Bank and IMF spring conference began on
Friday with a meeting of the Group of 7 wealthy nations - the U.S., Japan,
Germany, France, Britain, Italy and Canada - and was followed with a dinner
meeting of the Group of 20 countries, which include the seven wealthy nations
plus the major emerging markets such as China, Russia and Brazil. The conference
ended yesterday.

(Source: China Daily)