April 16, 2009 / 8:24 PM / 10 years ago

UPDATE 1-China currency significantly undervalued-IMF chief

(Adds additional comments, background)

WASHINGTON, April 16 (Reuters) - IMF Managing Director Dominique Strauss-Kahn said on Thursday that China’s currency remained significantly undervalued, although the country’s efforts to spur domestic growth would help with adjustment.

“The renminbi is still significantly undervalued, there is a long way to go, but correct policies are in place,” Strauss-Kahn told reporters at the National Press Club in Washington.

He was responding to a question about whether the Fund agreed with the United States’ stance on China. On Wednesday, the U.S. Treasury said it did not think China was keeping its currency artificially low to give it an unfair trade advantage, although it did say the yuan was undervalued.

Strauss-Kahn said China’s heavy stimulus spending would help its economy shift toward domestic consumption and away from exports, something that should help pare China’s huge reserves and rebalance the global economy. (Reporting by Lesley Wroughton and Emily Kaiser; Editing by Dan Grebler)

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