IMF soys pound "overvalued"

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The British pound is headed for further loses according to analysts after the International Monetary Fund warned the currency was still overvalued after the sharp fall experienced after Britain’s decision to leave the Eurozone.

At 7.43pm (GMT) the local currency was trading at US$1.3171 up from US$1.3127c in yesterday’s trading.

In a report out today the IMF noted that the pound was between 5 percent and 20 percent overvalued and at current levels, is not consistent with fundamental factors.

They also noted that Britain will have to undergo major changes in order to bring some stability to the pound,

"The overall effect on the degree of exchange rate overvaluation is uncertain and will much depend on the nature of any new arrangements that are put in place," the IMF said in its yearly report.

"Such effects will be assessed in the context of future reports," it said.

Heading into next week’s interest rate decision the pound is predicted to come under pressure as calls grow for the Bank of England to cut interest rates in order to prop up the economy and help ease some of the uncertainty surrounding the UK economy at the moment.

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