Chinese currency is 'undervalued', IMF tells G20 ministers

The International Monetary Fund (IMF) has stated its belief that the Chinese renminbi continues to be 'undervalued' on the global currency stage.

In a new report released by the international organisation at the latest meeting of G20 ministers in Seoul, it has been noted that the Chinese currency is particularly undervalued against the US dollar at the moment.

More specifically, the IMF reiterated its stance that the Chinese exchange rate remains too low.

Delegates at the South Korea summit were informed: "The Chinese renminbi has depreciated in real effective terms in tandem with the U.S. dollar and is assessed to be substantially undervalued from a medium-term perspective."

At the same time, the report concluded that the US dollar has continued to move towards 'medium-term equilibrium', following on from recent depreciation and the easing of fears over the US economy.

Meanwhile, the China Economic Review has reported that the head of China's state administration for foreign exchange has noted that high interest rates and an ongoing rise in currency inflows are prompting the renminbi to appreciate.

Posted by Sarah Pitton

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