BEIJING (AP) – China has agreed to buy $50 billion of the International Monetary Fund's first bond issue in a move that will help to strengthen the body's lending ability and diversify Beijing's foreign holdings.

The agreement announced Wednesday by the Washington-based IMF comes as the body tries to raise money to finance lending, especially to developing countries, to help economies weather the global downturn.

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

The purchase also would give China a new investment vehicle to help diversify its foreign holdings beyond US Treasury bills, in which it keeps a large share of its reserves.