The renminbi posted its largest one-day rise since it was de-pegged from the dollar in 2005 on Tuesday, raising hopes that Beijing was set to let its currency appreciate at a faster pace.

The renminbi rose 0.5 per cent to Rmb6.6424 against the dollar after the People’s Bank of China raised its daily reference rate, about which its currency is allowed to fluctuate, by the largest amount in three weeks. This raised speculation that China would allow its currency to rise further to reduce tensions ahead of this week’s meeting of G20 leaders in Seoul.

The move coincided with a statement from China’s State Administration of Foreign Exchange, which said it would force banks to hold more foreign exchange and strengthen auditing of overseas fundraising in an attempt to limit hot-money flows into the country.