China may widen Yuan trading band

In a recent interview, the always-coy Chairman of China’s Central Bank hinted that China may widen of the band in which the Chinese Yuan is permitted to move. The current band allows the Yuan to fluctuate +/- .3% per day, although in practice, the currency rarely moves by more than .01% per day. The Chairman was adamant, however, that China would not execute another one-off revaluation of the Yuan, like it did last summer. Rather, the RMB will continue to appreciate gradually, so as not to shock the global economy. Reuters reports:

Chinese officials have recently pledged to gradually increase the yuan’s flexibility by making better use of its daily trading band rather than doing another one-off revaluation.

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