About this work
The IIF’s March 2021 valuation update found greater dollar overvaluation even after its real effective depreciation. Robin Brooks and Jonathan Fortun linked the result to a widening US current account deficit amid fiscal stimulus and rapid recovery. Their model identified substantial undervaluation in China’s renminbi, Brazil’s real and Russia’s ruble, while Argentina and South Africa showed overvaluation. These are the study’s estimates for 2021, not current currency assessments.
Abstract
The IIF’s March 2021 valuation update found greater dollar overvaluation even after its real effective depreciation. Robin Brooks and Jonathan Fortun linked the result to a widening US current account deficit amid fiscal stimulus and rapid recovery. Their model identified substantial undervaluation in China’s renminbi, Brazil’s real and Russia’s ruble, while Argentina and South Africa showed overvaluation. These are the study’s estimates for 2021, not current currency assessments.
Cite this work
Robin Brooks, Jonathan Fortun (2021). Global Macro Views: FX Misalignments in 2021. Institute of International Finance.