“China’s central bank has taken global markets by surprise with a historic shift in its management of the yuan,” Bloomberg Intelligence chief Asia economist Tom Orlik writes.
The People’s Bank of China devalued its currency on Tuesday, after which the yuan fell by 1.9% against the dollar. And then on Wednesday, the bank shifted its official exchange rate once again, effectively allowing the Chinese currency to slide by another 1.9%.
Orlik noted that by the close of trading on Wednesday, the yuan fell to 6.39, down from Monday’s close of 6.2 — which is a level not seen since the summer of 2012.
And that might not be the end: The PBoC signalled that it would be more hands-off with the exchange rate, which could mean that the yuan will continue to slide.
But before we see any further depreciation, check out Orlik’s chart detailing the yuan’s tumultuous moves over the decade since the PBoC broke the dollar peg in 2005.
Business Insider Emails & Alerts
Site highlights each day to your inbox.