(18 March 2014 – China) China will ease its exchange rate controls, which have been criticised by its trading partners, as part of reforms aimed at making its economy more efficient.
The band in which the tightly controlled yuan is allowed to fluctuate each day against the United States dollar will double in size but stay relatively narrow, allowing a 2 percent change up or down.
Widening the trading band will help to “optimise the efficiency of capital allocation and market allocation of resources to accelerate economic development,” said a central bank statement.
Washington and other governments complain Beijing suppresses the value of the yuan, unfairly making Chinese exports cheaper abroad and hurting foreign competitors.
The move was widely expected and adds to a steady drumbeat of policy changes announced by the Communist Party to give market forces a bigger role in the state-dominated economy.
Allowing the yuan to rise in value would increase the buying power of Chinese households, helping to achieve the ruling party's goal of nurturing more sustainable economic growth based on domestic consumption instead of trade and investment.