Although worldwide inflation was generally under control, it warned advanced-economy central banks stoking their markets with liquidity to remain on guard for a change in price expectations.
However, it said, growing complaints about competitive exchange rate devaluations “appear overblown.”
“The US dollar and the euro appear moderately overvalued and the renminbi moderately undervalued. The evidence on valuation of the yen is mixed,” it said.
“The challenge for recipient countries is to accommodate the underlying trends while reducing the volatility of the flows when they threaten macro or financial stability,” it said.