SHANGHAI: China’s central bank loosened its grip on the yuan by doubling the daily trading range for the currency, adding teeth to a promise it would allow market forces to play a greater role in the economy and its markets.

Analysts said the move was a sign of confidence that the central bank had successfully fought off a plague of currency speculators, and at the same time signaled that regulators believe the economy is stable enough to handle more promised reforms going forward.

But as far as Beijing’s project to encourage the international usage of the yuan is concerned, there is less consensus, with some warning that more volatility could discourage firms from using the yuan in the short run.

The People’s Bank of China (PBOC) said the exchange rate will be allowed to rise or fall 2 percent from a daily midpoint rate it sets each morning.

The change is effective from Monday.

Many market participants have long viewed the yuan as a one-way appreciation bet.