March 12, 2010 8:51 PM

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RBI buys IMF notes of $10 bn

The Reserve Bank has entered into an agreement buy up to 10 billion US dollars worth notes from the IMF to help the multilateral agency shore up its resources for assisting countries hit by the global financial meltdown.The International Monetary Fund today said it signed an agreement with the RBI, under which the apex bank would purchase up to 10 billion USD worth notes, which are denominated in SDRs or special drawing rights the Fund's unit of account, with maximum maturity of five years.The IMF said in a statement in Washington today that the agreement offers India a safe investment instrument at the same time as boosting the Fund's capacity to help its members weather the global financial crisis, and to facilitate an early recovery from the worldwide economic crisis. Separately, the RBI today said the deal is part of its international efforts to support the Fund's lending capacity.RBI statement said, this agreement is a temporary bilateral arrangement for an initial period of one year, which may be extended by up to two years.The RBI bank said permanent increases in the resources of IMF are expected to take place through an increase in quotas and standing borrowing arrangements which are currently under negotiation.It added, with the signing of this agreement by the RBI with the IMF, India as member of the G-20, has fulfilled its commitments in this regard. The G-20 meeting held last April, had also endorsed to treble IMF's resources to USD 750 billion.

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