China let its currency fall sharply again Friday, sending another clear message to speculators that the yuan is not a one-way bet.
It was the ninth consecutive decline for a currency that is tightly controlled by the central bank and has rarely deviated from a steady appreciation.
For years, investors have viewed the continued strengthening of the Chinese currency as a very safe bet. Indeed, it’s gained about 10% since the middle of 2010.
But markets have been shocked this week by the sudden change in direction — the yuan has fallen 1.6% against the dollar over the past nine days.
The 0.4% drop on Friday was particular steep. One dollar now buys 6.15 yuan, up from a low of 6.04 in late January.
That may seem like a small move, but it’s significant for a currency that is only allowed to trade within a narrow range.
Analysts say the People’s Bank of China is behind the the reversal.
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