International Monetary Fund Managing Director Christine Lagarde has said Financial markets "vastly underestimated" the outcome of Britain's vote to leave the European Union but did not panic on Friday.

She said, "Despite the fact that markets had not anticipated that vote and therefore had priced in asset values and other currency values, the fact that the UK would probably remain, which led to a nice increase on the market in the days preceding the referendum. Well despite that, there was no panic. There was a violent brutal, immediate, massive move. You know the pound went down by 10 per cent."

Lagarde: How the UK, EU deal with vote decides market reactions

Lagarde told a forum at the Aspen Ideas Festival in Colorado that markets react from here depends on what steps UK and European policymakers take to deal with the separation vote and limit uncertainty.

She said policymakers and multilateral institutions needed to work cooperatively to deal with the implications of the Brexit vote, and noted that only Britain can trigger the formal divorce proceedings - European politicians cannot force their hands.