The Chinese yuan slipped today after the nation’s central bank allowed greater exchange rate flexibility, widening the trading band for the currency. The drop may help to bolster the weakening Chinese economy, increasing profits from overseas trade.
The People’s Bank of China extended the trading range to 2 percent on either side of a daily reference rate, while previously it was at 1 percent. It was the first move to increase exchange rate volatility since April 2012. The weakness of the yuan did not surprise market analysts but some of them believe that the currency will remain stable after the initial decline.
USD/CNY went up from 6.1505 to 6.1784 as of 15:46 GMT today.
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