International Monetary Fund staff believe the yuan is substantially undervalued based on expectations that China's current account surplus will increase as the global economic recovery gains strength, a senior IMF official said on Wednesday.

The IMF's mission chief to China Nigel Chalk told a conference call that IMF staff believe the current account will reassert itself over the next five years, as exports pick up and the authorities withdraw fiscal stimulus measures.

He said the Chinese authorities had disagreed with the staff's assessment that the current account surplus will reach 8 percent of gross domestic product over the next 5 years. (Reporting by Lesley Wroughton; Editing by Theodore d'Afflisio)