The US dollar is hot cake in the Nigerian market, but not just in the Nigerian market, traders across global markets are crazy about it.

But global lender, the International Monetary Fund, IMF believes the currency is over-rated or better put, over-valued.

And this is not good for the global economy.

According to the Fund, the value could add to global growth risks and trade tensions.

But not so for the Chinese currency, the Yuan, said the IMF.

In its annual External Sector Report, in Washington, the IMF said China’s yuan was in line with fundamentals and nearly half of global excessive current account balances.

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But the US dollar, it maintained, was over-valued because current account surpluses and deficits were becoming increasingly concentrated in advanced economies.

Also Read: IMF Predicts Stronger Growth For Nigerian Economy In Second Half Of 2018

The IMF report was based on exchange rates and current account surpluses and deficits.

The report was also centred on data and IMF staff projections as of June 22.

However, China’s yuan has dropped significantly in recent weeks as trade tensions with the United States have intensified.

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China’s yuan hit a fresh 13-month low on Tuesday of 6.8295 to the dollar as authorities in Beijing signaled further monetary loosening to support the economy amid an escalating tariff war with the United States.

The IMF said its staff estimated China’s current account surplus grew slightly last year to 1.7% of gross domestic product and listed China among countries with excessive balances.

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