That’s how to make sense of some blockbuster news out of Beijing that the country will adjust how it manages the renminbi, to link the currency’s value a bit more closely to market forces.
The immediate result was a de facto devaluation, with the Chinese currency falling 1.8 percent versus the dollar and 2.2 percent versus the euro on Tuesday. Those are big moves for the renminbi, considering that the government has had a policy of maintaining a strict trading band — enforced with both legal restrictions on the transfer of capital and the government’s trillions of dollars in reserves. Usually, the renminbi will move only a few hundredths of a percent against the dollar in a given day; the largest move this year had been 0.16 percent.