Five months after China shocked the world by devaluing the yuan, sparking widespread fears of a currency war with its Asian neighbors, investors are finding themselves with a case of deja vu.
As the yuan, also called renminbi, trades at four-month low this week, expectations for further deprecation have been resurrected.
The currency weakened for two consecutive sessions amid lower fixings from the central bank. On Thursday, the People’s Bank of China (PBoC) set the official midpoint rate at 6.4236 per dollar, 0.15 percent weaker than the previous fix, prompting the currency to open at its lowest level since August’s 2 percent devaluation..
China’s central bank lets the yuan spot rate rise or fall a maximum of 2 percent against the dollar relative to the official fixing rate.