China's central bank said Saturday that it decided to proceed even further with the reform of the Renminbi exchange rate to add flexibility to the RMB exchange rate.

The decision was made in view of the recent economic situation and financial market developments at home and abroad, as well as due to the balance of payments situation in China, the central bank said. However, it ruled out a one-off revaluation of the yuan as there was no basis for large changes in its value.

China's announcement was positively received by the world financial market.  The Asian stock market was up in general due to this announcement and the U.S. Dow Jones Index edged up more than 100 points befored it dropped back.

Experts noted it was the correct time for the exchange rate policy to return to its normal state, given the consolidated economic recovery, large decline in trade surplus and more balanced international payments, and the announcement meant an end to the crisis-mode policy the government took to cushion the blow from the global financial crisis.