Dollar decline in line with IMF forecast-IMF chief

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WASHINGTON, Nov 2 (Reuters) New International Monetary Fund chief Dominique Strauss-Kahn on Friday maintained the official IMF line that the dollar is overvalued and the euro's value is in line with fundamentals.

''When you look at the mid-term external balances, with the high (U.S.) deficit, which is falling, the view we have ... is that the dollar is still overvalued and so it is no surprise to see a declining dollar. It is in line with what the fund is saying,'' Strauss-Kahn told reporters.

At his first news conference since taking the reins of the IMF on Thursday, Strauss-Kahn also said the fund did not expect the slowdown of the U.S. economy to lead to a recession.

''We don't see a reason for a recession in the U.S. nor in any other economy,'' he said, adding that emerging economies were performing strongly.

He said forecasts were for a higher oil price and so it was not surprising to see energy prices rising, but he cautioned this could affect economies.

''The problem is what will be in the coming months a combination of the different downside effects of oil prices and consequences of the financial turmoil,'' he said, adding ''As far as we see ... there is no signal it will go further than a slowdown in the rate of growth.'' REUTERS SR KP2102

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