The International Monetary Fund said the country's stimulus policies had boosted the global economy, but contended that China's currency remains "undervalued” after a long review of China's economic policies.

The IMF indicated China's growth outlook remains favorable and commended Beijing's measures to contain property price inflation, though it also cautioned a need to safeguard the balance sheet of the domestic banking sector.

The report comes after China said it would strengthen the flexibility of the yuan exchange rate, in effect dropping the currency's peg to the dollar that had been in place since the middle of 2008 due to the global financial crisis.

The yuan has risen less than 1% against the dollar since the announcement. China has permitted publication of summaries but it hasn't approved the release of the full economic analysis.

The assessment was in line with recent IMF comments on China's economy and didn't result in a revision of the fund's forecast of China's growth. It still expects China's economy to grow 10.5% this year.

According to the summary, IMF directors praised China's "decisive policy response to the global economic crisis" and "welcomed" China's decision to let the yuan float somewhat. The directors said the move would increase the central bank's flexibility in setting monetary policy.

The report said that several directors agree that the exchange rate is undervalued. Several IMF officials said the U. S., Germany, France and the U. K. were among those who held that position. The report went on to say that over time a stronger yuan would help China move toward more private consumption from exports and investment as the driver of the economy's growth.

Eswar Prasad, a Cornell University economist who headed the IMF's China desk said that none of the countries pressed China to let the currency appreciate quickly.

The government may need to consider more measures to control increases in real estate prices with the consideration of a property tax and more financial market development to channel savings.