China gives more freedom to yuan

The yuan's value has changed little since July

China's central bank has announced further exchange rate changes, two months after it revalued the yuan for the first time in a decade.

The bank said the yuan would now be allowed to fluctuate more widely against non-dollar currencies.

However, the yuan would still have to keep within a narrow 0.3% trading band against the US currency, it said.

Since July, the yuan is no longer tied to the dollar, but floats to a limited extent against a basket of currencies.

As well as the dollar, these include the euro, the Japanese yen, the South Korean won, the UK pound, the Thai baht and the Russian rouble.

Technical adjustment

The latest reform means that the yuan will now be allowed to gain or lose up to 3% of its value against these currencies during a single day's trading. Until now, the limit had been 1.5%.

The move was described by analysts as a mere technical adjustment to the central bank's existing policy, rather than a change to the policy.

China revalued its currency by 2.1% in July, but has only allowed a small daily fluctuation in the exchange rate since then.

It is allowed to appreciate against the dollar, mollifying critics who say a cheap yuan has helped Chinese exports. However, it has done so by less than 0.3% since it was decoupled from the US currency.