REUTERS
The International Monetary Fund (IMF) has offered a cautious endorsement of China's new currency regime to let the market play a greater role in setting the value of its currency, the Financial Times reported.
The IMF said China's new pricing regime was "a welcome step as it should allow market forces to have a greater role in determining the exchange rate." It cautioned, however, that the "exact impact will depend on how the new mechanism is implemented in practice," according to the report.
The IMF stated it expects China to aim at achieving an effectively floating exchange-rate system within two to three years, saying that all the necessary conditions currently exist.
Earlier, China's central bank let the yuan weaken to its lowest rate against the U.S. dollar in almost three years. The lender said the move was a "one-off depreciation" of 1.9% in a move to make the exchange rate more market-oriented.