September 4, 2009

China happy with IMF bond purchase

China has further strengthened its financial clout by buying $50 billion of IMF bonds, its experts say.

After the purchase this week of the first ever such bond sale from the International Monetary Fund, China expects to exert more influence on restructuring the international financial system, the China Daily reported.

Quoting its think-tank economists, the report said the IMF bond purchase symbolized the country's very first step toward increasing its say in reshaping global financial institutions.

China currently has a staggering $2.1 trillion in foreign exchange reserves. It is also the largest creditor to the United States, currently holding about $776 billion in U.S. Treasuries.

However, China has been making large investments abroad to diversify its dollar holdings while expressing concern the declining U.S. dollar would adversely affect the value of its holdings

With its increasing financial strength, resulting from massive trade surpluses, China has been insisting it should have a greater voice in reforming the global financial system.