PARIS (MNI) - It would be dangerous for countries to end stimulus policies before their economic recoveries were clearly sustainable, the International Monetary Fund's Managing Director, Dominique Strauss-Kahn, told the International Herald Tribune in an interview published Wednesday.

With regard to foreign exchange rates, Strauss-Kahn told the IHT that the euro appeared "somewhat overvalued" while China's yuan was "still undervalued."

He added that a rise in the value of the Chinese currency would make sense in promoting China's "shift from an export-driven economy to one that was more dependent on domestic demand."

The main thrust of Strauss-Kahn's remarks pertained to the global economy and efforts to revive it.

"A premature exit is the main danger," Strauss-Kahn said, thus weighing in on the side of those who fear the global economy is still worryingly fragile.

"We have to be sure that the recovery is final, that domestic demand is self-sustaining and the peak in unemployment is on the foreseeable horizon," Strauss-Kahn told the newspaper. He added that, "the bigger risk is of growth not coming back, a job-less recovery, and to believe that we are out of the woods."

Harking back to events a decade ago, when harsh IMF medicine helped prolong an economic meltdown is Asia, the IMF head said the Fund has "learned a lot from the Asian crisis -- that one-size-fits-all doesn't work and that you have to adapt to the constraints of the country."

Strauss-Kahn acknowledged the risks of ongoing stimulus spending, in particular the accumulation of bloated government deficits and debt, and the danger that large volumes of excess liquidity could provoke excessive risk taking and lead to asset price bubbles.

"I understand the concerns about deficits and they are not unfounded," he said. "Defaults [by sovereign issuers], of course, are a concern, but they are not likely."

According to the IHT, Strauss-Kahn said the IMF was more optimistic about the global economic outlook now than it had been in September, when it released its last economic forecasts. In particular, "the U.S. recovery appears to be stronger than we thought in September," he remarked. Overall, "what I see in the global figures now is that things are moving faster than expected."