The Reserve Bank of India (RBI) will buy up to $10 billion in notes from the International Monetary Fund (IMF) as part of global efforts to support its lending capacity.
RBI today entered into a note purchase agreement with the IMF under which the RBI will purchase from the IMF notes for an amount up to the equivalent of $10 billion.
"This is a part of the international efforts to support the IMF's lending capacity following the decision of the G-20 in its London summit to treble the resources available to the IMF to $750 billion," RBI said in a release.
RBI said the agreement, which is a temporary bilateral arrangement for an initial period of one year, might be extended by a period of up to two years.
"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," RBI said, adding, that the signing of the agreement by the RBI with the IMF in fulfillment of India's commitment as a member of the G-20.