IMF official warns of bubbles in emerging markets

Some emerging economies are at risk of uncontrolable capital movements, bubbles, and accumulation of reserves, the IMF's chief economist Olivier Blanchard said in an interview published on Monday.

"These countries have interest rates that are higher than the developed countries and more pressure on their exchange rates," Blanchard said in an interview with France's Le Monde newspaper.

"It can only be difficult for Brazil to see the real appreciating when the yuan is weakening with the dollar."

The International Monetary Fund official also said countries were moving towards more diversification in their foreign exchange reserves. This was desirable, but it would not lead to a collapse of the U.S. dollar, he said