The People’s Bank of China (PBoC) has allowed the renminbi to depreciate nearly two per cent against the US dollar, cutting the currency to its lowest value in three years, following disappointing trade and inflation data.
Every morning at 9:15am local time, the Chinese central bank fixes the currency, with investors able to trade it within two per cent either way of the mid-point.
This morning China fixed its currency 1.9 per cent lower, the largest cut on record. The midpoint was set for its currency at 6.2298 yuan per dollar, down from Monday’s fix of 6.1162 yuan, and the central bank said it was aiming for a depreciation of two per cent.
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The move indicates the PBoC wants to push exports, a key driver for the world’s second largest economy, after recent trade data showed exports plummeted 8.3 per cent year-on-year in July.
Devaluing the currency is China’s latest bid to shore up the economy.