The Australian dollar has gained some ground after China’s central bank said it would lift controls on lending interest rates, allowing financial institutions to set them.

At 0700 AEST on Monday, the local unit was trading at 91.79 US cents, up from 91.71 cents on Friday.

The People’s Bank of China (PBOC) on Friday night, Australian time, said the move would lower financing costs for businesses and support China’s long-term economic restructuring.

ANZ senior manager FX in Auckland Sam Tuck said the announcement drove the Aussie slightly higher.

“We saw a small boost when that was announced and then it dribbled back out as people decided its impact would be somewhat limited,” Tuck said.

“But it’s still an important step in terms of liberalisation.”