The Reserve Bank of India (RBI) has entered into an agreement buy up to $10 billion (over Rs 45,000 crore) worth notes from the International Monetary Fund (IMF) to help the multilateral agency shore up its resources for assisting countries hit by the global financial meltdown.
The IMF today said it signed an agreement with the RBI, under which the apex bank would purchase up to $10 billion worth notes, which are denominated in SDRs (special drawing rights), the Fund's unit of account, with maximum maturity of five years.
"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," the IMF said in a statement in Washington today.
Separately, the RBI today said the deal is part of its international efforts to support the Fund's lending capacity.
"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 statement said.
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.
"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," it added.
The G-20 meeting held last April, had also endorsed to treble IMF's resources to $750 billion.
