China drops yuan for third day in a row
Peter Walden, News Editor
13 Aug 2015, 10:56 a.m.
China have set the guiding rate for the yuan lower for the third consecutive day in a row. On Tuesday the People Bank of China (PBOC) announced that it would start to set daily rates based on the previous days trading in an attempt to bring the yuan closed to a free-floating currency.
The move to drop the yuan has triggered concerns over a currency war designed to boost China’s exports. Recently, economic data has shown a decline in Chinese exports, causing more worries that the world’s second largest economy is in a major slowdown. A weakened yuan will make Chinese products cheaper abroad, making exports more competitive in international markets.
Sources involved in policy making in China have stated that the government have been pushing for the yuan to go even lower, suggesting some pressure for an overall devaluation of around 10 percent.