The IMF said the major reform updates a 30-year-old program and targets currency manipulation that could destabilize trade and private capital flows.

However, IMF officials sidestepped questions about China, criticized for keeping its yuan currency undervalued in order to gain a competitive edge in exports.

The new legal framework for monitoring a country's program does not target any specific country, but provides a level playing field for all its 185 members by being clearer and broader in scope, IMF officials insisted.

"It reaffirms that surveillance should be focused on our core mandate, namely promoting countries' external stability," IMF managing director Rodrigo Rato said Monday, according to the prepared text of a speech he delivered in Montreal, Canada.

"And it gives clear guidance to our members on how they should run their exchange-rate policies, on what is acceptable to the international community, and what is not."

Perhaps the most delicate issue of exchange-rate policy revolves around the claim of some US lawmakers that China is keeping its yuan currency undervalued to gain an unfair competitive edge.

The US trade gap with China ballooned to 232.5 billion dollars in 2006.

Last week the US Treasury declined to label China a currency manipulator, saying that although its tightly controlled exchange rates have spawned a host of economic problems, it was unable to determine that Beijing intentionally left the yuan undervalued.