Yuan exchange rate lowered again

Yuan decline in the competitiveness of Chinese products on world markets higher

For the third day in a row, China lowered again the value of its currency, the yuan, against the US dollar.



Decline against the dollar by 1% on Thursday (13/8), smaller than the first cut rate nearly 2%, and surprised the market.

People's Bank of China, on Tuesday (11/8) announced to establish the daily exchange rate based on the previous day's trading. It would bring Yuan closer to a floating exchange rate.

The move raised concerns about the exchange rate war to spur China's exports.

The latest economic data showed the decline in Chinese exports, adding to fears that the country with the second largest economy in the economic field that is experiencing economic downturn even longer.

Currency weaker yuan would make Chinese products cheaper abroad, which means that Chinese companies will be more competitive in the world market.

People's Bank of China, which is the central bank of China, that sets the middle exchange rate on Thursday was 6,4010 yuan to $ 1, which berari 1.1% decline in the exchange rate of the previous day, 6,3306 yuan per US $ 1.

Previously, appeared an attempt to relieve anxiety by saying that the economic environment is strong, sustained trade surplus, a strong fiscal position and foreign exchange reserves are large will provide "strong support" for the exchange rate.

But data related economic weakness and a new policy to set the exchange rate based on the previous day's trading, will create more market power to lower the yuan exchange rate lower again in the coming days.

(Source: BBC)