China scrapped the yuan鈥檚 peg to the U.S. dollar yesterday and tied it to a basket of currencies, the naton鈥檚 central bank said, the first steps in highly anticipated reorms aimed at letting the currency float freely.

The yuan currency has been strengthened, effective immediately, to a rate of 8.11 to the U.S. dollar - compared to the 8.28 it has been set at for more than a decade. The new trading regime will begin Friday, the government said in an announcement on state television.
The yuan will now be allowed to trade in a tight 0.3 percent band against a basket of foreign currencies, the government said. It didn鈥檛 say which currencies.
It said the central bank would announce the yuan鈥檚 closing price each day, and that rate would be the midpoint of the next day鈥檚 trading band.