The U.S. dollar is still somewhat overvalued while the Chinese renminbi is substantially undervalued, the International Monetary Fund said on Monday in an assessment of Group of 20 major economies.

The Chinese renminbi has depreciated in real effective terms in tandem with the U.S. dollar and is assessed to be substantially undervalued from a medium-term perspective, the IMF said in a note to a G20 ministers meeting in Seoul, South Korea, at the weekend but only released on Monday.

The IMF has for some time argued that the Chinese exchange rate is too low and is significantly undervalued against the U.S. dollar.

The IMF said the recent depreciation of the euro meant it had moved toward its fundamental value. Meanwhile, the Japanese yen is broadly in line with medium-term fundamentals following its sharp decline since late 2008, the Fund added.

The IMF said as the world economy moves out of recession more quickly than anticipated, a surge in capital flows into emerging market economies has put pressure on the exchange rates of commodity exporters and emerging economies with floating currencies such as Australia, South Africa, Brazil and Indonesia.

Currency appreciation is being resisted in some emerging economies and while this may be appropriate in some cases, it contributes to delaying the normalization of monetary policy and complicates global rebalancing in others, the IMF said.

It said the U.S. dollar has depreciated as financial conditions have improved and market fears have eased, but is still somewhat overvalued. However, the dollar has moved closer to its medium-term equilibrium, the IMF added.

The IMF maintained its forecasts for world economic growth, predicting growth of 3.9 percent in 2010 and 4.3 percent next year.

Among key risks to the outlook was growing concern about the fiscal situation in smaller advanced economies such as Greece, and the possibility those troubles could spill over into other EU economies, it said.

(Reporting by Lesley Wroughton, Editing by Chizu Nomiyama)