Canada welcomed on Thursday Chinese government's decision to adopt a more flexible exchange rate for its currency, the yuan.

"It remains to be seen exactly how the new system will work and how much flexibility it will provide. But this is an encouraging first step," Minister of Finance Ralph Goodale said in a statement.

China announced Thursday that the RMB yuan will be traded at a rate of 8.11 to the US dollar starting Thursday, and the yuan to US dollar pegging system is switched to a basket of foreign currencies.

Over the past few years, the Chinese yuan has been pegged to the US dollar at the rate of one dollar for 8.27 yuan, the latest move revalues the rate by 2.1 percent.

Source: Xinhua