Corporate foreign exchange news

Published by Jamie JemmesonChina may widen the daily trading band in which the yuan can fluctuate against the US dollar, according to the Caijing magazine.The currency is currently allowed to fluctuate by up to five per cent above and below the central yuan-dollar parity set by the People's Bank of China each trading day.Market News International reports that there has been increasing criticism of the country's foreign exchange trading policy, with the US particularly vocal in its opposition to what is deemed to be a strategy of keeping the yuan artificially low against the dollar to boost exports during the economic crisis.In response, the Chinese government has remained staunch in its commitment to its current policy and refused to bow to external pressure to revaluate the yuan."If the central bank does not want to see a quick rate hike, a better way to fight inflation would be to expand the daily yuan trading band to allow the yuan to appreciate properly," said an unnamed government source, speaking to Caijing magazine.For more information on foreign exchange treasury services and risk management, visit our Corporate FX site