Easing Controls: China to widen yuan trading band

BEIJING: China’s central bank said Saturday it would widen the yuan’s trading band against the dollar, loosening currency controls in a major step towards adopting more market-oriented reforms. The yuan is currently allowed to trade 0.5% on either side of a midpoint price set by the central bank every trading day. The new rules will come into effect on Monday and allow the currency to fluctuate by up to 1.0% either side, the bank said in a statement. Beijing’s trading partners have long criticised its yuan exchange rate, saying it is kept artificially low, fuelling a flow of cheap exports that have helped trigger huge trade deficits between some countries and China.

Published in The Express Tribune, April 15^th, 2012.