WASHINGTON: The International Monetary Fund said the dollar was overvalued on the currency markets, while the euro, yen and pound were in line with fundamentals.
"The real effective exchange rates of Japan, the euro area, and the UK all appear broadly in line with medium-term fundamentals, while the US dollar is on the strong side of fundamentals," the IMF said in a report to the Group of 20 economic powers.
The IMF noted that recent government interventions in the foreign-exchange market had contributed to the imbalance, which has sparked fears of "currency wars" to protect exports amid the global economic recovery.
"While advanced economies have generally avoided intervening in currency markets, some have intervened more recently to limit rapid appreciations, contributing to the above-mentioned tension on this issue."
The IMF reiterated its view that China’s currency, the yuan, remained "substantially undervalued."
