* China to allow more yuan flexibility in either direction -Wen
SHANGHAI, Nov 19 (Reuters) – China will make the yuan more flexible in either direction and recent reforms to make the currency more market-oriented have begun to achieve some results, Premier Wen Jiabao said on Saturday.
“China will continue to closely monitor the yuan’s trading movements … and will strengthen yuan’s trading flexibility in either direction,” the premier was quoted as saying in an evening news bulletin on state broadcaster CCTV.Wen’s comments on the yuan were in line with recent central bank moves to encourage the yuan’s value to fluctuate more widely within the daily trading band. The People’s Bank of China (PBOC) allows the yuan to rise or fall 0.5 percent from its daily mid-point.
Some analysts and traders have argued that the central bank has been laying the groundwork for a widening of the trading band, which would allow China to say in the face of renewed U.S. pressure over the yuan that it is indeed moving ahead with reform to loosen its grip on the currency.