China indicates it will allow yuan to strengthen

China has indicated it will allow the yuan to rise against the dollar and other Western currencies.

The Chinese central bank announced it would make its exchange rate mechanism "more flexible", saying this had been made possible by the global recovery.

The yuan has been effectively pegged to the dollar, drawing criticism that China was protecting its exporters.

The head of the International Monetary Fund and the US treasury secretary have welcomed China's announcement.

The US had been particularly critical of Beijing, accusing it of keeping its currency artificially weak.

The yuan has been held at about 6.83 to the dollar since July 2008.

No timetable for the changes in the currency mechanism have been given.

China has in the past made clear that it will carry out reforms at its own pace.