India promises $10-billion bond purchase

The International Monetary Fund yesterday hailed India's pledge to buy $10 billion worth of IMF bonds, as top emerging economies pressed for a greater say in running the global economy.

"I welcome the announcement by India of its intention to support the Fund's lending capacity through the purchase of up to $10 billion worth of IMF notes," Fund director Dominique Strauss-Kahn said in a statement.

Indian Finance Minister Pranab Mukherjee announced the purchase last Friday at a G20 finance ministers meeting in London.

The pledge comes after China said it would snap up $50 billion worth of the asset, created in July this year as a means of propping up the Washington-based institution's finances.

The IMF has struggled to keep pace with loan demands from nations battling to cope with the global economic crisis, which has caused credit markets and fiscal revenues to wither.

"This investment will help underpin the international financial system by ensuring the Fund has adequate resources to meet the financing needs of its membership," said Strauss-Kahn. But it is no free lunch for the IMF, with emerging economies demanding a greater say in global finance in return for easing the fund's financial pressures.