Unlike other reforms, letting the yuan move more freely could offer an immediate boon, given markets have turned bearish and the currency now looks more likely to test the band's bottom rather than upper limits.
A weaker yuan would offer some relief to struggling exporters even though, at least in theory, greater currency volatility would work to cancel out those benefits.
Both currency traders and government economists point out, however, that the central bank still has the means to restrain the yuan and steer it lower while avoiding sharp swings.
Haibin Zhu, China economist at JPMorgan in Hong Kong, said the timing of the PBOC announcements just days after poor economic data raised suspicions that the step was mainly designed as a stimulus measure.
"This could be triggered by the weaker-than-expected economic data in Jan-February The weak economic data raised the pressure for PBOC to ease its monetary policy," he said in a research note.
(Read more: The yuan trading band has been widened- Now what?)
The yuan's losses against the dollar are approaching 3 percent this year, and it hit a one-year low on Thursday.
"The yuan has been depreciating and there is no risk of big appreciation," said a former central bank researcher who is now a senior economist at a top government think-tank in Beijing.
"On the contrary, it will be a good thing if we see some depreciation, that's precisely what we want."
Think-tank sources say the PBOC is prepared to take its strongest action since 2012 to loosen monetary policy if economic growth slows further, by cutting the amount of cash that banks must keep as reserves.
China's sporadic cash crunches since last year, along with risks in the shadow banking sector, have put the PBOC on defensive and could hinder the reform agenda.
A deposit insurance scheme designed to protect savers against bank failures, which many had expected to be launched at the turn of the year, may still get unveiled before the middle of 2014, economists say, but the follow-up will be slow.
Other preparations include an expansion of the interbank market for certificates of deposits (CDs).
(Read more: Default risks trigger fresh fears over China property market)
Top banking regulator Shang Fulin said last week China would launch pilot programs in four provinces to test the development of privately-owned banks.
The PBOC hopes that higher money rates would ultimately force banks to cut their risky lending, but demand for loans and other forms of financing from the state-owned firms and local governments that suck up the bulk of funding remains strong.