The Chinese central bank has announced they will allow the restricted Yuan to fluctuate intra-day to allow for better price discovery.
The Yuan trades at a specific range against the greenback. In a single trading day the maximum movement is 0.5% fromt he midpoint price set by the central bank.
China is among other emerging market nations whose currency has restrictions, the Indian Rupee and Brazilian Real all trade as NDF’s.
The new measures by the central bank allow the Yuan to trade with a 1% daily range.
TrustedBrokerz: The Source More Traders Are TrustingGo to article >>
The Yuan is currently trading at 6.30 against the US dollar.
Since the 2008 global recession China has deliberately kept its currency low to boost exports. China has been criticised by leading economies including the Untied States of protectionist strategies to fuel its own economy.
China has been working hard to bring in currency reforms, Hong Kong is paving itself as the offshore financial hub for the Renminbi.
Forexmagnates team wrote a detailed report on margin FX in China, available in the current Q4 2011 quarterly report.