China's central bank Saturday decided to widen the yuan's trading band against the dollar in a major step towards loosening currency controls.
The yuan is currently allowed to trade 0.5 percent on either side of a midpoint price set by the central bank every trading day.
The new rules -- seen as a shift towards adopting more market-oriented reforms -- will come into effect on Monday and allow the currency to fluctuate by up to 1.0 percent either side, the bank said in a statement.
Beijing's trading partners have long criticised its yuan exchange rate, saying it is kept artificially low, fuelling a flow of cheap exports that have helped trigger huge trade deficits between some countries and China.
However, that pressure has eased since data this year showed China's trade balance with the rest of the world has shifted, ending a long period of huge trade surpluses based on low-cost labour and a cheap yuan.
China has repeatedly vowed to loosen its grip on the yuan as it moves towards full convertibility, but has rejected calls for a faster appreciation for fear of hurting its manufacturing sector, a key driver of its economy.
Saturday's announcement means that the yuan will be allowed to fluctuate further against the dollar but not necessarily appreciate as much as China's trading partners, including the United States, might like.
The bank said the change was decided "in order to meet market demands... (and) enhance the flexibility of RMB (the renminbi, as the yuan is officially known) exchange rate in both directions".
"In view of the domestic and international economic and financial conditions, the People's Bank of China will continue to fulfil its mandates in relation to the RMB exchange rate, keeping RMB exchange rate basically stable."
Ultimately, the government wants the yuan to rival the dollar as a global reserve currency, and to this end it has gradually allowed the currency to trade more freely.
After a pilot programe last year was judged successful, in March this year it gave permission for firms across China to pay for imports and exports in yuan, a way of helping to increase the use of the yuan in trade deals.
BIST 100 index rises 0.44 pct while US dollar/Turkish lira rate falls to 3.49
The day before, the dollar had rallied against both main rivals and the Dow reached a fresh record high after the US central bank kept alive the chance of a December increase in American borrowing costs.
Monthly index sees decline of 3.4 pct, according to Turkish Statistical Institute
BIST 100 index decreases 0.31 pct while US dollar/Turkish lira rate rose to 3.51
Frankfurt equities sagged despite a rally for shares in German heavy industry giant ThyssenKrupp, which announced a deal with Indian group Tata to merge their steel operations in Europe.
BIST 100 index drops 0.02 pct while US dollar/Turkish lira rate stands over 3.48
The move was seen as a bid to weather US-imposed sanctions on the embattled country.
Regulators decided in May to fine Banco Popolare di Vicenza a total of 11.2 million euros ($13.4 million), the ECB said in a press release.
BIST 100 index rises slightly 0.09 pct while US dollar/Turkish lira rate falls to 3.43
BIST 100 index rises 0.10 pct while US dollar/Turkish lira rate stands around 3.46
Borsa Istanbul's BIST 100 index goes down 0.89 pct at close, USD/TRY rate stands around at 3.44