China’s central bank underlined its intention to give the market a bigger role in determining the value of its currency when it announced a doubling of the renminbi’s trading band on Saturday. But investors stung by its clampdown on speculators will be cautious in testing its tolerance of greater volatility.

In the short term, many appear to be betting that the authorities will countenance – or engineer – a mild depreciation. The renminbi marked the first day of its new trading regime with a 0.5 per cent fall, taking it to an 11-month low of 6.1784 against the dollar in the onshore market. Offshore, it hit its lowest level since May before recovering to trade 0.1 per cent down at 6.1630 to the dollar.

Although the People’s Bank of China had set its daily fixing rate slightly stronger than on Friday, preventing a bigger fall, analysts think that policy makers may still want to drive out hot money, underlining their message that speculators should not rely on one-way appreciation in the renminbi.