Although China was under considerable pressure – notably from the US in recent months – to revalue its currency, the decision surprised financial markets. The full implications for trade and regional currencies in the months ahead are not yet clear.
Under the new regime, which will be based on a basket of currencies rather than the US dollar alone, the renminbi has been revalued by 2.1% from 8.28 to 8.11 to the dollar. The currency would be allowed to float but on a limited basis of plus or minus 0.3% daily.
