* Strauss-Kahn: stronger yuan would boost domestic demand

* Dollar to remain dominant for at least a decade

* Warns world policymakers against early exit from stimulus

By Jason Subler and Simon Rabinovitch

BEIJING, Nov 16 (Reuters) - A stronger yuan is part of the policy mix that Beijing needs to increase domestic consumption and help ease global imbalances, the head of the International Monetary Fund said on Monday.

The comments by Dominique Strauss-Kahn, the IMF's managing director, add to a drumbeat of demands that China scrap its currency's peg to the dollar, reinstated 16 months ago to help the country's exporters weather the global recession.

"A stronger currency is part of the package of necessary reforms," he said. "Allowing the renminbi and other Asian currencies to rise would help increase the purchasing power of households, raise the labour share of income, and provide the right incentives to reorient investment."

Strauss-Kahn's remarks coincided with a visit to China by U.S. President Barack Obama, who has pledged to raise the exchange rate of the yuan, also known as the renminbi, as part of discussions on how to put the world economy on a more-even keel. [ID:nSP327252]

Strauss-Kahn noted that China was already taking steps, including wider healthcare coverage, to boost household spending by reducing people's need to save for a rainy day.