China’s central bank has again cut the guiding rate for the yuan following yesterday’s record 1.9 per cent devaluation.
The move has prompted falls across Asian stockmarkets, with the Shanghai Composite index down 1.06 per cent at 3886.32 and the Hong Kong Hang Seng index down 2.59 per cent at 23,863.20 as at 8.30 this morning. Japan’s Nikkei 225 index also fell 1.58 per cent to 20,392.77.
The BBC reports the People’s Bank of China has fixed the guiding rate of the yuan down 1.6 per cent to 6.3306 against the dollar. It follows a “one-off” adjustment to the rate yesterday of 1.9 per cent.
The bank issued a statement to the markets, saying: “Looking at the international and domestic economic situation, currently there is no basis for a sustained depreciation trend for the yuan.”
But the Financial Times quotes an analysts’ note from Societe Generale, which says: “There are no compelling reasons for [the yuan] to strengthen and fundamentals coupled speculative pressure argues for more weakness.”