China took a milestone step in turning the yuan into a global currency on Saturday by doubling the size of its trading band against the dollar, pushing through a crucial reform that further liberalizes its nascent financial markets.

The People's Bank of China said it would allow the yuan to rise or fall 1 percent from a mid-point every day, effective Monday, compared with its previous 0.5 percent limit.

Analysts said the timing of the move underlines Beijing's belief that the yuan is near its equilibrium level and that China's economy, although cooling, is sturdy enough to handle important, long-promised, structural reforms.

The move could also help China deflect criticism of its currency policy ahead of the annual spring meeting of the International Monetary Fund in Washington next week.

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