Amid an increasing dispute between Beijing and Washington, the Central Bank lowered the yuan’s daily reference rate once again which has weakened China’s currency once again.
On Wednesday, the People’s Bank of China fixed the yuan’s central parity rate at 6.9996 per US dollar which is lower than the level set on Tuesday when it hit an 11-year low.
On the same day, in the late morning, the onshore yuan slid reached 7.0454 while offshore it reached 7.0796. After the US announced plans to impose fresh tariffs on Chinese imports from September 1, it prompted Washington to officially brand Beijing a “currency manipulator”.
After that on Monday, the yuan broke the key 7.0 threshold against the dollar. It was stated by the Chinese central bank on Tuesday that it is “resolutely opposed” to such a label, and the bank’s governor Yi Gang has long vowed it would not engage in a competitive devaluation.
Granting to decrease the value of yuan will cause Chinese exports cheaper and balance some of the burdens of punitive US tariffs. The Chinese government limits its movement against the US dollar to a 2% range on either side of a central equality rate that the central bank seta every day to reflect markets trends and control volatility.