IMF's European director says euro fairly valued

WASHINGTON (Reuters) - The euro is fairly valued in effective terms and there is scope for more interest rate hikes from the European Central Bank if growth continues as expected, the International Monetary Fund's European director said on Saturday.

"We think it's (the euro) at about the right level for sustained development of the euro area and the euro area economy," Michael Deppler told a news conference during the IMF's spring meetings.

"In terms of the ECB, our view is that there should be a withdrawal of stimulus," he said, adding that there was room for some "cautious tightening" in interest rates based on the assumption of sustained above-potential growth.

"We don't know where the demarcation line is between withdrawal and moving into restrictive (interest-rate territory). We're approaching that zone for sure," he said.