The head of the World Trade Organisation on Sunday expressed his concern over unilateral interventions on currency markets, amid tensions between China and the United States over a so-called currency war.
Asked about the dangers of such a currency war, Pascal Lamy told German weekly Welt am Sonntag: "I would not talk of a currency war, but of tensions or frictions. The uncoordinated interventions on currency markets worries me."
Lamy added: "No one would doubt that the yuan is undervalued. But it is not clear whether a higher yuan rate would automatically produce more jobs in the United States."
Washington says Beijing is deliberately keeping the yuan undervalued to boost its exports at America's expense.
And last month, Japan intervened in the international currency market for the first time in six years in a bid to halt a dramatic surge in the value of the yen.
On Thursday, the International Monetary Fund said the dollar was overvalued on currency markets, while the euro, yen and pound were each in line with fundamentals and the yuan was undervalued.
Meanwhile, some other emerging economies, notably South Africa and countries in Latin America, have allowed their currencies to appreciate "substantially," the Washington-based organisation said.
European Union leaders have urged the G20 of major and emerging powers meeting in South Korea next month to "avoid engaging in exchange rate moves aimed at gaining short-term competitive advantage."
The so-called currency war has sparked fears of a return to the 'beggar-thy-neighbour' policies at the heart of the 1930s Great Depression. Lamy said: "We are all afraid of that."
Nevertheless, he added: "Two years ago, after the Lehman Brothers crash, almost everyone thought this type of protectionism would occur again. Until now, despite the huge shock, this has not happened."