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BEIJING Feb 19 China will expand the yuan
trading band in an orderly way and quicken convertibility on the
capital account, the central bank said on Wednesday, reaffirming
its long-standing stance.
In a statement published on its website, www.pbc.gov.cn, the
People's Bank of China also said it would steadily expand
cross-border yuan usage.
"We will gradually perfect the renminbi (yuan) formation
mechanism and expand the exchange rate's floating range in an
orderly manner," it said.
The central bank has consistently flagged its intention to
liberalise financial markets and allow the yuan to
trade more freely. Central bank head Zhou Xiaochuan said in
November that the PBOC would "basically" exit from regular
intervention on the currency market.
The yuan's trading band was last widened in April 2012 to
allow the exchange rate to rise or fall 1 percent either side of
the midpoint fixing announced daily by the central bank.
The yuan's slow but steady appreciation against the dollar
has attracted inflows to yuan-denominated assets in China and
offshore centres such as Hong Kong, Singapore and London. The
currency rose 3 percent last year and traders see similar gains
HSBC expects the yuan to become fully convertible within
five years. The currency has been on track to become the third
largest trade settlement currency by 2015.
(Reporting by Kevin Yao; Editing by Richard Borsuk)