China’s central bank set the midpoint for the renminbi’s trading band above 7 to the dollar on Thursday for the first time since the global financial crisis, allowing further weakness in a move that could drag down currencies across the Asia-Pacific region.

But the renminbi was slightly stronger on the day, climbing 0.2 per cent against the dollar at Rmb7.042 in late-morning trading after the People’s Bank of China set the midpoint, around which the currency can trade 2 per cent in either direction, at Rmb7.0039.

Ken Cheung Kin Tai, Asian foreign exchange strategist at Mizuho Bank, said that while setting the fix above seven was “official confirmation” of the currency entering a new normal trading range, PBoC had in effect achieved a “soft landing of renminbi depreciation”.