China expanded the yuan's daily trading band against the dollar on Saturday in a milestone move underscoring its ambition to liberalise its nascent financial markets and turn them into a global force. China's central bank said the yuan would be allowed to rise or fall 1 percent against the dollar on a daily basis from a mid-point set by the bank effective April 16.
The yuan could only rise or fall 0.5 percent a day from the mid-point previously. "From April 16, 2012, the renminbi exchange rate against the dollar in the spot interbank currency market will be widened from 0.5 percent to 1 percent," the People's Bank of China said in a statement on its website. Analysts polled by Reuters in March, as market talk about the risk of an imminent move ran high, said they expected the band to be doubled this year to 1 percent.