Widening on Yuan Trading Band Expected

Not for the first time this year, talk that China could widen the trading band for the yuan is doing the rounds with some analysts saying a move could come as early as this weekend.

China’s decision a week ago to scrap the floor on lending rates for commercial banks, as it takes another step towards opening up its financial markets, makes other reform measures such as widening the yuan’s trading band and establishing a new interest-rate framework more likely, say analysts at Credit Agricole.

“[One]message coming from the lending floor removal is that the currency regime will soon be liberalized as well,” analysts at Credit Agricole said in a note published on Wednesday.


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