RMB falls 0.4% against the dollar after trading band adjustment

The People’s Bank of China raised the midpoint range of China’s currency trading band by 0.54% on Monday following the yuan’s rise on Friday of 0.62% to RMB6.3175 against the dollar, The Financial Times reported. The shift followed through on an August pledge to allow the midpoint to follow market movements, but by Monday afternoon the currency had weakened to RMB6.3420, down 0.4%. It is “in China’s interest to see more volatility and uncertainty in the market” as the International Monetary Fund’s reserve currency decision approaches in late November, said Zhou Hao, of Commerzbank in Singapore. Zhou said the central bank “will tolerate a bigger swing but won’t lose control over the market.”