Widening of renminbi trading band unlikely

"Abrupt expansion of the band leads to two-way volatility," said Sailesh Jha, senior regional economist at Barclays Capital in Singapore. "Foreign exchange affects exports, but can also impact the domestic economy through jobs and investment."

Jha added that, given the trading band was widened from 0.3% to 0.5% in May, there is no compulsion for China to make a move further this year.