Macro Analysis /
Global

IMF flags overvalued dollar and undervalued EM currencies

  • The IMF's annual External Sector Report provides a framework for calculating the "fair value" of 30 systemic currencies

  • US$ is flagged as nearly 20% overvalued, 6 of 13 EM currencies as undervalued, and only one (the ZAR) as overvalued

  • Currencies can deviate from fair value estimates for prolonged periods, with Fed as the key near-term driver

IMF flags overvalued dollar and undervalued EM currencies
Patrick Curran
Tellimer Research
16 August 2022
Published byTellimer Research

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