The International Monetary Fund (IMF) has called on China to revise monetary policy to allow faster appreciation on the slowly-rising yuan.

On the foreign exchange markets overnight the dollar continued to hover at one month lows, trading at 117.04 yen and $1.2752 against the euro early this morning.

China is still not "winning the battle" to curb credit-funded investment through monetary policy and administrative controls, said the IMF's head China officer Steve Dunaway.

"We think what is needed is better flexibility of the exchange rate and equally important is probably giving the central bank more discretion of setting interest rates so they have more latitude to operate with monetary policy," Mr Dunaway told the press.

This had to balanced against rising interest rates that could suck in additional capital flows however, he added.

The IMF's estimate for Chinese growth over 2006 has been revised to at least 10.5 per cent, up from a ten per cent estimate in September.