Peoples’ Bank of China relaxes control of market for renminbi
THE PEOPLE’S Bank of China (PBOC) will today loosen the tight grip it keeps on foreign exchange of the yuan, after announcing plans to widen the band in which the currency is traded.
The central bank will now allow the Yuan to be traded within a two per cent corridor of the official rate it sets against the dollar, up from the one per cent band it previously allowed. The Chinese authorities have so far only made small steps towards a fully floating yuan which would allow the currency to be traded like others.
The central bank’s statement added that it would continue the process of implementing market mechanisms into foreign exchange of the yuan.
International policymakers have regularly complained that the yuan is manipulated unfairly, though China abandoned a fixed peg to the dollar nearly a decade ago.