WASHINGTON, April 21 (Reuters) - China is likely to follow up its decision to widen the trading band for its renminbi currency with more steps to let market forces set exchange rates, Peoples Bank of China Deputy Governor Yi Gang said on Saturday.
The PBOC on April 14 announced a widening of the renminbi’s trading band from 0.5 percent to 1 percent - a move welcomed by the International Monetary Fund, the United States and other trade partners who have long argued the currency was undervalued.
Asked at a panel on the sidelines of the IMF spring meetings in Washington if Beijing planned further changes, Yi said “Yes, I think so.”
“This reform is aiming at increasing the flexibility of the renminbi exchange rate and making market force(s) to play a more important role in determining the rate,” he said.
“It’s time to let the market more or less to decide the rate (while) reducing the intervention,” added Yi.
Yi did not elaborate on the PBOC’s plans or the timing of follow-on measures on the renminbi, also known as the yuan, but pointed to signs of a wider trading range for the Chinese currency in offshore trade in Hong Kong.
“If you look at the China market and the offshore market in the last two quarters, you will see that there (has) been persistent two-way bet on the renminbi exchange rate,” he said.
“For a long time in the past .. it was always a one-way bet on renminbi appreciation,” said Yi.