French Finance Minister Christine Lagarde has become the first woman to head the International Monetary Fund after its executive board chose her over Mexican central bank governor Agustin Carstens.

Lagarde, who succeeds Dominique Strauss-Kahn, is the first woman named to the top IMF post since the institution's inception in 1944.

She takes over at a tumultuous time when emerging nations want a greater voice at the IMF and the organisation's reputation has been tarred by a scandal involving Dominique Strauss-Kahn.