March 16, 2014 / 4:47 PM / 5 years ago

U.S. Treasury's Lew welcomes Chinese currency move

U.S. Treasury Secretary Jack Lew testifies before the Senate Budget Committee about the President's 2015 Budget on Capitol Hill in Washington, March 12, 2014. REUTERS/Kevin Lamarque

WASHINGTON (Reuters) - The United States welcomed China’s recent decision to allow its currency’s value to vary more against the U.S. dollar, a Treasury spokesperson said on Sunday.

U.S. Treasury Secretary Jack Lew spoke on Saturday evening by phone with Chinese vice-premier Wang Yang in a previously scheduled call, the spokesperson said.

“Lew welcomed China’s recent announcement to widen the daily trading band for the renminbi against the U.S. dollar and emphasized the need for China to move towards a market-determined exchange rate,” the spokesperson said.

China’s central bank eased its grip on the yuan on Saturday by doubling the daily trading range for the currency. The move added teeth to a promise it would allow market forces to play a greater role in the economy and its markets.

The People’s Bank of China (PBOC) said the exchange rate will be allowed to rise or fall 2 percent from a daily midpoint rate CNY=SAEC it sets each morning. The change is effective from Monday.

Analysts said the move was a sign of confidence that the central bank had successfully fought off a plague of currency speculators and signaled that regulators believe the economy was stable enough to handle more promised reforms going forward.

Reporting by Jason Lange; Editing by Jim Loney/Rosalind Russell

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