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Reform set to broaden yuan range

By Wang Xiaotian | China Daily | Updated: 2013-04-17 09:19

China will continue to broaden the permitted fluctuation range of yuan trading as the next step in deepening currency reform, a central bank official said on Tuesday.

"Market-oriented progress in interest rate and currency exchange rate reform will provide huge opportunities as well as challenges for the country's payment and settlement system," said Wang Yu, deputy director-general of the research bureau of the People's Bank of China.

She made the remarks while attending a forum in Beijing, without elaborating as to what extent and when the monetary authorities would make new adjustment to the range.

Last April, the central bank allowed the yuan to fluctuate by 1 percent from a daily midpoint, doubling the previous 0.5 percent. It was the first time since May 2007 that the trading band was widened.

The yuan rose to a 19-year high on Tuesday after the central bank set a record fixing against the dollar for the third consecutive trading day.

The yuan strengthened to 6.1831 per US dollar in Shanghai, against a reference rate of 6.2408, according to the China Foreign Exchange Trade System. It touched 6.1800 earlier, the highest level since the government unified official and market exchange rates at the end of 1993.

Wang said the central bank would also improve the foreign exchange market to promote currency reform, by introducing more market players and trading methods, broadening the allowed trading scale, and reducing trading costs.

As China continues to reform the yuan and promote international use of the currency, it needs to further open and diversify the domestic payment and settlement industry, the Chinese Academy of Social Sciences said in a report released on Tuesday.

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