IMF chief says yuan still too low

WASHINGTON: The head of the International Monetary Fund said on Monday that China's yuan was still undervalued, despite the central bank's pledge to make its exchange rate more flexible.

But IMF Managing Director Dominique Strauss-Kahn warned that even a sharp revaluation of the yuan, also known as the renminbi, would fail to correct the imbalances that impair the global economy.

"We still believe, as we have a general view on this, that the renminbi is undervalued," Strauss-Kahn told reporters.

China unpegged its currency to the dollar in 2005 and earlier this month pledged to let it trade more freely against the dollar, although it ruled out any dramatic moves.