Announced over the weekend by the People's Bank of China, the trading band expansion is considered a clear signal indicating the nation's confidence with its economic system, recognized as the globe's most rapidly developing. Thus far this year, economic data indicating the Asian nation might be churning through a slowdown has raised eyebrows about the world's second-largest economy, which trails only that of the U.S.
In "the midst of domestic political turmoil, reform-minded officials seem to be sensing a window of opportunity to undertake significant steps towards market-oriented reforms," senior fellow Eswar Prasad with the Brookings Institution in Washington, also the former head of the China division at the IMF, told Bloomberg. Prasad viewed "a renewed momentum towards currency and financial market reforms."
Not since 2007 has the Asian nation widened the band, Bloomberg reports. The World Bank forecasts economic development in China to register this year at 8.2 percent.
But the gravity of China's announcement was trumped by developments in debt-hobbled Spain as it prepares for a bond sale, according to MarketWatch.