Brazil joins Russia, China in eyeing IMF bonds

“This support is important to help end the international financial crisis,” Mantega said, adding that a trade surplus and US$204 billion in reserves has positioned Brazil to help the International Monetary Fund boost lending to other emerging economies. Chinese officials have also expressed interest in buying as much as US$50 billion in IMF bonds, while a Russian central bank official on Wednesday said his bank would reduce U.S. Treasury holdings to invest in the IMF notes instead. Russia now holds about US$120 billion, or 30 percent, of its hard currency reserves in U.S. Treasuries and said it would redirect up to US$10 billion to the IMF.

India also plans to buy some of the notes, although it has not yet said how much it will spend, Mantega said, according to the state-run Agencia Brasil news agency.

The announcements come just a week before the BRIC nations — Brazil, Russia, India and China — gather for talks in Russia, where they are widely expected to discuss alternatives to the U.S. dollar as the global reserve currency.

Russian officials have expressed concern about the dollar for several years and China has advocated a shift away from the greenback, warning that large U.S. budget deficits and monetary expansion could weaken the world's chief currency.

Commodity exporters like Brazil and Russia are particularly vulnerable because most raw materials including oil, soy and minerals are priced in U.S. dollars, making it even more likely that a weak greenback would slash their export income.

Russia is looking to diversify that risk with a move to IMF bonds, analysts said. “They need to spread the risk out,” said Ron Smith, chief strategist at Alfa Bank, one of Russia's biggest private lenders. “They've been doing some diversification for the past several years measuring everything against the dollar-euro basket.”

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