June 21 (Reuters) - Canadian Finance Minister Jim Flaherty said on Monday that China's decision over the weekend to give its yuan currency more flexibility was quite encouraging.

China has shown some flexibility on currency before the crisis and has now indicated it will go back in that direction, which is good for everyone, he told reporters in New York.

Days before leaders of the Group of 20 major developed and developing nations meet in Toronto, China's central bank said it would gradually make the yuan's exchange rate more flexible, in a possible return to policies it pursued from 2005 to 2008. (Reporting by Kristina Cooke and William Schomberg; Editing by James Dalgleish)