China doubled the limit for the yuan’s daily moves against the U.S. dollar, easing controls on the exchange rate as appreciation bets waned amid slower economic growth.
The yuan will, from today, be able to trade as much as 2 percent on either side of a daily central bank reference rate, from 1 percent previously, the People’s Bank of China said in a statement on its website on March 15. The band was last widened in April 2012 from 0.5 percent, and before that from 0.3 percent in May 2007.
The move underscores pledges from China’s leaders to make the exchange rate more market based and promote freer movement of capital in and out of the country for investment purposes. The central bank said it will continue to increase the yuan’s two-way flexibility after last month highlighting an “orderly” broadening of the currency’s trading band among its 2014 policy goals.