IMF to revise way it monitors forex policies

WASHINGTON, June 30 (Reuters) - In a major about-face, the International Monetary Fund on Tuesday said it would revise its rules on how it monitors foreign exchange policies of member countries, acknowledging that its efforts to step up oversight of currencies had backfired.

In a staff report, the IMF said it would no longer use the specific phrase "fundamental misalignment" that it had decided to use in 2007 to pressure countries to alter foreign exchange policies.

"The attempt to apply exchange rate-related 'labels'-- for instance, the use of specific terminology such as fundamental misalignment -- has proved an impediment to effective implementing of the decision," the IMF said. (Reporting by Lesley Wroughton; Editing by Dan Grebler)