China: China widens yuan trading band
April 21, 2012
On 14 April, the People's Bank of China (PBOC) announced the widening of the yuan's daily trading band against the USD from 0.5% to 1.0%, effective from 16 April. The PBOC stated that it will continue to keep "the yuan exchange rate basically stable at an adaptive and equilibrium level based on market supply and demand." The measure was broadly welcomed, as many countries, in particular the United States, claim that the Chinese yuan is kept artificially low, thereby pushing up China's trade balance. Analysts consider this move as a further step towards the liberalization of the exchange rate. On 20 April, the Chinese yuan (CNY or RMB) was trading at 6.31 per USD, which was 0.3% stronger than in the same day of the previous month and contrasted the mild 0.1% loss recorded in March. On an annual basis, the CNY is now 3.3% the stronger than in the same day last year. However, the yuan has weakened 0.2% versus the USD so for this year.