China to buy first IMF bonds for 50 billion dollars

China has agreed to buy the first International Monetary Fund bonds for about 50 billion dollars, the IMF said Wednesday.

IMF managing director Dominique Strauss-Kahn and the deputy governor of the People?s Bank of China, Yi Gang, signed the agreement Wednesday at IMF headquarters in Washington, the multilateral institution said.

Under the agreement, the Chinese central bank "would purchase up to SDR 32 billion (around 50 billion dollars) in IMF notes," it said.

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 note purchase agreement is the first in the history of the fund," the 186-nation institution said.

China in early June said it could invest up to 50 billion dollars in IMF bonds.

The IMF executive board approved the plan to issue notes to governments on July 1.

The issuance of bonds is an unprecedented step to boost IMF resources as the institution struggles to provide financing to help member nations cope with the global financial and economic crises.

"The agreement offers China a safe investment instrument. It will also boost the fund?s capacity to help its membership -- particularly the developing and emerging market countries -- weather the global financial crisis, and facilitate an early recovery of the global economy," the IMF said.