SHANGHAI, Rabi’I 27, 1437, January 07, 2016, SPA — China accelerated the depreciation of the yuan on Thursday, sending regional currencies and stock markets tumbling as investors feared the Asian giant could trigger competitive currency devaluations from trading partners, Reuters reported.
China’s stock markets were suspended for the rest of the day less than half an hour after opening as a new circuit-breaking mechanism was tripped for the second time this week.
The People’s Bank of China (PBOC) again surprised markets by setting the official midpoint rate on the yuan, also known as the renminbi (RMB), at 6.5646 per dollar, the lowest since March 2011.
That was 0.5 percent weaker than the day before and the biggest daily drop since last August, when an abrupt near 2 percent devaluation of the currency also roiled markets.
The central bank’s fixings have helped drive the yuan down not just against the dollar this week, but also other major currencies, including a 3.5 percent fall against the yen and 0.8 percent against the euro.
That raised concerns that China might be aiming for a competitive devaluation to help its struggling exporters.
11:58 LOCAL TIME 08:58 GMT