China to Buy IFC Bonds to Boost Trade Finance

飞雪寒冰

China has agreed to buy bonds issued by the International Finance Corporation, an arm of the World Bank, to help finance trade credit, the People’s Bank of China said.



The central bank did not give further details about the transaction in a statement on its  website on April 1.



The IFC’s new trade finance program “aims to provide liquidity support to financial institutions engaged in trade finance by providing them additional credit lines so as to restore the damaged trade finance channels and to fight the global economic recession triggered by the crisis,” the central bank said.



The central bank cited a World Trade Organization estimate that the global trade finance gap is expected to widen from US$25 billion in November 2008 to US$100 billion by the end of 2009.

飞雪寒冰

“The inadequacy of trade finance will directly harm global trade and investment, slow down the recovery of the world economy, and hinder the progress of poverty reduction and sustainable development programs,” the central bank said.

The central bank noted that China has provided liquidity assistance to trade finance programs run by multilateral regional development groups including the African Development Bank, Asian Development Bank and Caribbean Development Bank.



The country has contributed US$350 million to the Inter-American Development Bank Group since it joined in January.

The central bank also said it has signed currency swap deals with other countries’ central banks to maintain financial stability and boost bilateral trade and investment.



Since December 2008, China has signed a total of 650 billion yuan worth of currency swaps with South Korea, Hong Kong, Malaysia, Indonesia, Belarus and Argentina

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zhbin163

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