China’s central bank is unlikely to further widen the USD-CNY band until at least the second half of the year, according to a Standard Chartered report.
Recent comments by People’s Bank of China (PBoC) deputy governor Yi Gang and adviser Chen Yulu suggest that the authorities see no “urgent need” to adjust the band in 2015, the report said.
In his work report to the National People’s Congress, Premier Li Keqiang said the government would continue to focus on increasing the currency’s two-way flexibility while keeping the exchange rate at an appropriate and balanced level.
There has been much speculation over the possibility of a further band widening as spot trading of the currency has been close to the top of the onshore band.
The PBoC last widened the band to 2 percent in March 2014 from 1 percent.
Separately, the Standard Chartered Renminbi Globalization Index, which tracks the progress of renminbi business activity, rose 2.3 percent to 2,137 in January from the previous month, the fastest gain in eight months.
The increase is attributed to larger amounts of cross-border renminbi payments and foreign exchange turnover.
The renminbi is now the world’s No.5 most used payment currency, trailing the US dollar, euro, British pound and Japanese yen. It ranks eighth in international payments as represented in SWIFT flows.
The Chinese currency is expected to replace the Japanese yen as a G4 currency by 2020, the report said.
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