Maputo, Mozambique
Maputo, Mozambique

The values of most currencies in the "frontier markets," which include Ukraine, Kazakhstan and Nigeria, are "significantly overvalued," Bank of America Merrill Lynch said on Tuesday.

"In contrast to EMFX [emerging market foreign exchange], which is largely floating and has adjusted a lot, most of the frontier FX still is pegged and thus at risk of disorderly devaluations," the bank said in a report. "Indeed, while EMFX is now around fair value and strains seem to be easing, lately shoes have started to drop in frontier: Ghana, Kazakhstan, Nigeria, Ukraine -- to name a few."

FX chart
Many emerging market currencies are overvalued. Bank of America Merrill Lynch Global Research

The biggest overvaluation exists in Mozambique, Uganda, Tanzania and Rwanda, which run current account deficits of 12 percent to 40 percent of gross domestic product, the bank said.