(Reuters) - China will gradually make the yuan's exchange rate more flexible, the central bank said on Saturday, indicating that it was ready to break a 23-month-old dollar peg that has come under intense fire from abroad
The People's Bank of China all but ruled out the one-off revaluation or major appreciation hoped for by critics, saying there was "no basis for big fluctuations or changes" in the exchange rate.
However, it was clear that China intended its announcement -- published in English at around the same time as Chinese, a departure from usual practice -- to mark the end of the yuan's de facto peg to the dollar, which it had defended as a "special policy" to protect its economy from the global financial crisis.
Whether the announcement will be enough to placate critics, especially U.S. lawmakers who say an undervalued currency gives China an unfair trade advantage, remains to be seen.
