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IMF: RMB still "significantly undervalued"

The IMF has determined that China’s currency remains "significantly undervalued" despite being unpegged from the US dollar on June 19, the Wall Street Journal reported. A report by the organization praised the decision to end the peg, adding that a falling current account surplus may indicate that the currency is readjusting to more natural market levels. However, the IMF argued that the surplus was temporary, and that "significant action" was required to raise the renminbi’s value. The report on China’s economy, begun in March and its first since 2007, will be released in September unless Beijing withholds permission to publish it. Perhaps in response to the report, Hu Jianguo, head of China’s Ministry of Commerce, emphasized that the decision to float the renminbi showed China to be a "responsible" member of the international community.

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