The Chinese yuan's trading band will slowly but surely expand as this year continues, the central bank of the Asian nation stated during the Wednesday trade session.
The People's Bank of China also indicated on its website that it intends to push ahead with efforts to develop more uses for the renminbi, the PBOC said after two days of meetings closed on Tuesday. The PBOC most recently augmented the trading band in April 2012; before that the central bank opened the trading band in May 2007.
"Reduced yuan appreciation pressure is favorable for band widening as it won't invite speculation on the currency," co-head of research Banny Lam with Agricultural Bank of China International Securities Ltd. in Hong Kong told Bloomberg on Wednesday. "It's inevitable that the PBOC will allow more flexibility in the exchange rate as the nation is experimenting with yuan convertibility in the free-trade zone."
The ruling Community part said this past November that it intends to advance yuan convertibility this year.
The yuan's gains last year against the world's reserve currency amounted to 3 percent, according to Reuters.
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