China’s new step toward currency control will let the banks make their own exchange rates when it comes to dealing with their customers.

The announcement came Thursday morning and the latest development plan in China’s government-controlled financial system to make it more market-oriented.

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This latest currency control step of China received criticisms from U.S. as well as other countries; saying that it will only make the currency undervalued. The Chinese exporters will just have an advantage on setting prices and foreign competitors will encounter problems along the way.

Beijing’s changes on its currency control permits the bank to manage foreign currency.

The foreign currency regulator of China released a statement saying, "can set exchange rates for the renminbi by themselves for customers based on market demand and price-setting ability."

Beijing have been doing financial changes in the recent months. Until now, they still allow its yuan (CYN) to vary at two percent against U.S. dollar as well as other foreign currencies.

The current changes on its financial system also indicate that the customers will have a better deal when the bank narrows down the margin between buying and selling foreign currencies. However, there’s no indication from the statement if they will allow it to go beyond the standard trading band or by how much.

It is said that financial Chinese leaders has plans of letting the yuan drift freely, but it will be decades away according to financial analysts.

Chinese government also declared the plans of making private financed banks.

Tagsfinancial system, banks, foreign currency